China offers olive branch to the west at World Economic Forum, but some still skeptical
China’s economy has taken a beating in recent years with draconian lockdowns, quarantines, and strict COVID-19 containment measures
As leaders gathered for a second day of the World Economic Forum in Davos, China appeared to offer an olive branch to western leaders, yet many remain skeptical given Beijing’s hostile diplomacy under the country’s authoritarian president, Xi Jinping.
Vice Premier Liu He told a group of business and political leaders Tuesday that China was eager to revive mutually beneficial business relations, saying the market – and not the government – must play a "fundamental role in the allocation of resources."
"All-round opening-up is the basis of state policy and the key driver of economic progress. China’s national reality dictates that opening up to the world is a must, not an expediency," Liu said. "We must open up wider and make it work better."
Liu’s comments alluded to the battering China’s economy has taken in recent years, with draconian lockdowns, quarantines, and strict COVID-19 containment measures.
Liu, a senior economic official on the State Cabinet, China's Cabinet, that "if we work hard enough, we are confident that in 2023, China's growth will most likely return to its normal trend. The Chinese economy will see a significant improvement."
Liu said China expects to see a major rise in its imports, more investment by companies and return to regular consumption habits over the coming months. He says easing COVID restrictions ending quarantines for people arriving from abroad are key factors in the economy's recovery.
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His remarks come after China released data showing its economic growth fell to its second-lowest level in at least four decades last year under pressure from anti-virus controls and a real estate slump that Liu said nearly led the economy to a systemic crisis.
China's economy grew by 3% in 2022, less than half of the previous year's 8.1% rate. That was the second-lowest annual rate since at least the 1970s after 2020, when growth fell to 2.4%.
Liu emphasized government efforts to manage the earlier decline, particularly in supporting the real estate industry, which accounts for 40% of all bank lending and 50% of local government revenue. After years of breakneck economic growth, he says China's goal is "high-quality economic development," reforming state-owned enterprises and supporting the private sector.
European Union Chief Ursula von der Leyen, who spoke before Liu, appeared more skeptical of China’s purported aims, accusing Beijing of trying to undermine European companies with subsidies and obstructing access to its internal market, The Telegraph reported.
"Competition on net-zero must be based on a level playing field," she said. "We will not hesitate to open investigations if markets are being distorted by such subsidies."
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The annual meeting of the World Economic Forum in Davos, Switzerland runs through Friday.