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Economists expect steady growth in China in 2022

On Behalf of | Dec 8, 2021 | Business Law

American businesses in China face many challenges unique to operating in this complex country. These range from navigating a culture that often holds different values to handling an assortment of legal requirements.

Expectations for annual growth also play a role in the success of companies; many experts believe economic growth in China for 2022 will remain stable despite looming risks.

A look at growth risks

According to a report from Bloomberg News, many independent experts put expected economic growth in China at around 5% in 2022. This estimate falls a bit below the government’s growth forecast of around 6% for the year.

Some analysts point to a possible property slump that could exert a drag on consumer spending and available capital for companies. Others point to weaker contributions from exports as well as lower consumption. The majority of consulted economists emphasized a lower investment in the real estate sector which could permeate much of the economy.

A look at fiscal policy

Government policy will also play a key role in the performance of the economy throughout China in 2022. Some analysts predict a more flexible approach on credit and a slight increase in approvals for rental unit construction.

Interest rates should remain stable for the upcoming year, though some areas, perhaps small businesses, could see targeted reductions. Fiscal policy could also utilize tax cuts for small firms, households and environmentally friendly developments or programs.

Some indications show the People’s Bank of China will initiate an easing of some fiscal policy matters. Some areas of the country could see increased spending. Overall, observers expect growth in China in 2022 to remain steady though not as high as in some recent years.