"China's 5% Economic Growth Target... Opportunities for Korean Companies to Expand Entry"

Active Economic Stimulus through Digital Infrastructure and Eco-friendly Consumption

[Asia Economy Reporter Kim Jin-ho] As China is expected to actively stimulate its economy this year by investing in digital infrastructure and promoting eco-friendly consumption to achieve economic growth targets, opportunities for Korean companies to enter the Chinese market are also expected to expand accordingly.

According to the "2022 Economic and Industrial Policy Directions and Implications of China Seen Through the Two Sessions" report released on the 14th by the Korea International Trade Association's Institute for International Trade and Commerce, China recently announced an economic growth target of 5.5% at the national Two Sessions.

The key economic and industrial policy keywords presented were ▲stable growth ▲fostering strong small and medium enterprises (SMEs) ▲reducing corporate tax burdens ▲qualitative growth (high-quality development) ▲dual carbon goals (carbon peak and carbon neutrality) ▲regional development. Notably, nearly half of the 31 provinces and cities nationwide, 14 in total, adopted "stable growth" as their top priority, indicating that investment expansion and consumption promotion will be used as major means to achieve stable growth going forward.

The report anticipated that China will mobilize various measures to maintain the "Bao Wu (保五, maintaining growth rate in the 5% range)." To ensure stable growth, China announced large-scale digital infrastructure construction and policies to promote consumption of eco-friendly home appliances. In particular, it emphasized the "DongshuxiSuan (??西算)" process, which involves transmitting, storing, and utilizing big data produced in the eastern region to the western region.

Additionally, corporate support policies such as fostering specialized, refined, distinctive, and innovative (Zhuanjingtexin, ?精特新) strong SMEs and reducing tax burdens for small and micro enterprises are expected to be significantly strengthened. Continuous industrial structural transformation is also expected to be maintained by fostering new industries such as next-generation semiconductors and artificial intelligence, and promoting the smartization of existing manufacturing processes.

The report analyzed, "Our companies see new business opportunities opening in China's digital infrastructure and low-carbon, clean energy, and eco-friendly markets."

However, it added that China's scientific and technological innovation and industrial restructuring to enhance manufacturing competitiveness may have a negative impact on Korean exports, which are concentrated on intermediate goods exports. Jeon Bo-hee, senior researcher at the Korea International Trade Association, stated, "It is necessary to prepare comprehensive support measures so that Korea's key industries such as semiconductors, batteries, and petrochemicals can maintain the technological gap with China," and suggested, "Companies also need to actively cooperate with Chinese companies in fields such as the digital economy, advanced manufacturing, and carbon neutrality to discover future-oriented business models."

This content was produced with the assistance of AI translation services.