China had the fastest and strongest post-Covid economic rebound. The recovery was largely based on support for production and the supply side, including exports. But is this recovery sustainable or is it just a spike? China’s policy path diverges from all other major economies, where monetary easing and economic policies have been designed to support demand and consumption during a protracted pandemic.
China’s macroeconomic policies, including the implications of decarbonation pledges and the recent demographic findings, have been the subject of much public debate in China in recent months. It is a rare enough occurrence in today’s China to merit a closer look. This policy paper unfolds some of these debates and provides a glimpse at China’s internal assessments of the global pandemic’s impact and its growth prospects.
The Chinese views reported in this paper use numbers from major developed economies as comparison points - even if the official Chinese doctrine insists that the country is still a developing economy. On policies, these views are largely about domestic issues, adding the risks from U.S. policies but with little attention to other economies.
The most common element dominating these perspectives is uncertainty, due to external factors. It serves to explain neutral budget and credit policies, against the advocates of a more proactive monetary policy.