Martial Arts: "China Likely to Implement Massive Economic Stimulus to Maintain 5% Economic Growth"

China's Economic Growth Target Set at 5.5% for This Year
"All Economic Measures to Be Fully Mobilized"
Digital Infrastructure Industry Expected to Benefit

Second Plenary Session of the CPPCC Held in Beijing
(Beijing Xinhua=Yonhap News) On the 7th (local time), the Second Plenary Session of the Chinese People's Political Consultative Conference (CPPCC) is being held at the Great Hall of the People in Beijing, China. Along with the National People's Congress (NPC), the CPPCC forms the "Two Sessions," which are annual meetings held every March to determine China's national policy direction for the year. March 7, 2022
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[Asia Economy Sejong=Reporter Lee Jun-hyung] There is a forecast that China will undertake large-scale economic stimulus measures to maintain an economic growth rate in the 5% range this year. It is analyzed that opportunities for domestic companies to enter the Chinese market may expand.

The Korea International Trade Association's International Trade and Commerce Research Institute announced this on the 13th in the report titled "China's Economic and Industrial Policy Directions and Implications Seen Through the 2022 Two Sessions." Earlier, China set this year's economic growth target at 5.5% during the recent annual major political event, the Two Sessions (National People's Congress and Chinese People's Political Consultative Conference). The key economic and industrial policy keywords presented were ▲stable growth ▲fostering strong small and medium enterprises ▲reducing corporate tax burdens ▲qualitative growth ▲dual carbon (carbon peak and carbon neutrality) ▲regional development, totaling six.

The Trade Association expects China to mobilize various economic measures to defend the "Bao Wu" (maintaining growth rate in the 5% range). Since 14 out of 31 provinces and cities nationwide have adopted "stable growth" as their top priority, the Trade Association explains that investment expansion and consumption promotion are highly likely to be used as major means going forward.

In particular, the digital infrastructure industry is expected to benefit. China emphasized the "East Data West Computing" project, which transmits, stores, and utilizes big data produced in the east to the west through a large-scale digital new infrastructure construction policy.

Chinese President Xi Jinping Applauding at the Closing Ceremony of the National People's Congress
(Beijing AFP=Yonhap News) Chinese President Xi Jinping is applauding at the closing ceremony of the plenary session of the National People's Congress (NPC) held at the Great Hall of the People in Beijing on March 11, 2022.
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Corporate support policies are also expected to be significantly strengthened. Representative policies include fostering specialized, refined, characteristic, and innovative (Jeonjeongteuksin) strong small and medium enterprises, and reducing tax burdens for small and micro enterprises.

Additionally, the Trade Association analyzed that China will focus on nurturing new industries such as next-generation semiconductors and artificial intelligence (AI), as well as smartifying existing manufacturing processes. The Trade Association stated in the report, "Our companies can gain new business opportunities in China's digital infrastructure and eco-friendly markets such as low-carbon and clean energy," but added, "However, the enhancement of China's manufacturing competitiveness may negatively affect Korean exports, which are concentrated on intermediate goods exports, so mid- to long-term preparation is necessary."

The Trade Association emphasized the need for government support to prepare for the weakening export competitiveness of domestic companies. Jeon Bo-hee, senior researcher at the Trade Association, said, "It is necessary to prepare comprehensive support measures so that Korea's leading industries such as semiconductors and batteries can maintain the technological gap with China," and added, "Companies should also actively cooperate with China in areas such as carbon neutrality to discover future-oriented business models."

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