Consumption is the key. To restore and expand it, China needs to roll out sound, targeted policies. Obstacles that currently hinder consumption growth need to be removed, especially in the real estate and automobile sectors.

Industrial and supply chains have become the main theater of competition between China and the United States. America’s technology war will be deliberate, intense and long-term. For this reason, China must be strategically prepared for a protracted fight.

In March 2022, the Chinese government set a target of 5-5.5% GDP growth for the year. At the time, such growth levels appeared perfectly attainable. But within a month, the Omicron variant had arrived, triggering strict lockdowns that, while stemming the spread of the coronavirus, caused serious damage to the supply and demand sides of the economy. China’s growth rate for 2022 was just 3%.

With the lift of zero-Covid restrictions, Chinese policymakers are in search of a new politico-economic model to sustain Chinese growth and innovation in the 2020s.

Most experts see China’s economy moving on an upward track. If a 5.0 percent growth rate is achieved this year, as expected, China will contribute 0.9 percentage points to slumping global GDP growth, and it will continue to be a leading economic engine in the years ahead.

China will stay on a positive trajectory this year, but its achievements did not come easily. Some fundamentals still need to be addressed, as the foundation underpinning the recovery is not yet rock solid. Boosting incomes would make a difference.

2022 was not a good year for the Chinese economy. In 2022, the COVID-19 epidemic, which started in December 2019, caused significant economic disruptions in the second quarter, especially in Shanghai, resulting in a real rate of growth for the Mainland economy of only 3.0% for the year as a whole. This is the second lowest annual rate since economic reform and opening began in 1978.

Despite a slowing of global economic tailwinds, China is expected to see 4.7 percent growth next year for many reasons, including domestic consumption. Government spending will expand, and private investment will be encouraged. All in all, China will gradually see a return to economic boom times.

Colossal structural shifts are taking place in the global economy, as evidenced by the huge challenges of the ongoing year. In 2023, China is moving toward recovery, but the West will cope with recession and the specter of a debt crisis.

China’s market reforms and economic restrictions have transformed its economy into a more capitalistic state since 1979. What can it do to ensure equality as costs of living rise and income disparity becomes more pronounced?