Former Australian Prime Minister Kevin Rudd refuted the theory that China has reached its peak, believing that the current economic slowdown in China is only a temporary downturn caused by the COVID-19 epidemic and the decline of China’s real estate industry.
Speaking at the World Economic Forum in Davos, the former Labor politician said he believed the theory of China peaking was “intellectually and analytically flawed” and that there were “untapped untapped potential” in China’s consumer market. potential” to drive long-term growth.
Rudd said at a panel meeting called “Recharging Growth in China”: “There are articles in many places around the world talking about the theory of China’s peaking, saying that China’s economy has peaked for some reasons and that Slow, worsening, but I’ve never really accepted that view.”
The latest data released by the Chinese government on Wednesday showed that China’s gross domestic product (GDP) will grow by 5.2% in 2023, and the growth rate in 2022 will be only 3% due to the impact of the government’s strict COVID-19 prevention policies on the economy.
The growth rate of 5.2% is far lower than the growth level of China’s economy in the ten years before the epidemic. Due to the downward trend of China’s economy, China’s GDP growth rate before the epidemic has dropped from 10.6% in 2010 to 6% in 2019.
Hong Kong’s Hang Seng Index closed down 3.7% on Wednesday, and Japan’s Nikkei Index closed down 0.4%.
Kevin Rudd, currently Australia’s ambassador to the United States, views the recent slowdown in China’s economy as a temporary phenomenon. He believes that the “unprecedented” size and volume of China’s consumer market has the potential to continue to drive economic growth.
Rudd said: “As long as Chinese consumers have confidence in the future, the economy will maintain good growth. This is a core fact. Don’t forget that the size of the Chinese consumer market is unprecedented in global economic history.”
Rudd blamed the recent slowdown in China’s economy on the COVID-19 pandemic and the downturn in the real estate market, acknowledging that Chinese consumers “have had a hard time in recent years.”
Rudd said: “Like us, they have had to endure the impact of the new crown epidemic before. Later, the real estate market, which accounts for 28% of China’s GDP, experienced unprecedented turmoil. If your savings are invested in real estate, frankly, your investment has now been lost.”
(This article is translated from MarketWatch. MarketWatch is operated by Dow Jones, the parent company of The Wall Street Journal, but MarketWatch is independent from Dow Jones Newswires and The Wall Street Journal.)