DBS chief economist optimistic about China's growth outlook

BEIJING - China's economy has shown more positive signals of recovery as a slew of measures rolled out across China to boost the property market have taken effect, said Taimur Baig, chief economist and managing director of DBS Group Research in a recent exclusive interview with Xinhua.

DBS, Singapore's major banking group, sees the supporting measures announced by the Chinese authorities over the last few months to boost the property market as substantial, said Baig.

"Sorting out China's property related problems will take time, but we're encouraged by the totality of the measures that have been taken in recent months."

Besides the better-than-expected upturn in China's property market, the resilient trade performance in China also helps propel the world's second-largest economy, said Baig.

"Chinese exporters have been doing pretty well, independent of month to month fluctuations. If you look at trade for the entire first four months of the year, it's been better than expected," he noted.

According to the General Administration of Customs, China's exports in the first four months of 2024 grew by 4.9 percent year-on-year to 7.81 trillion yuan ($1.1 trillion).

On consumption, Baig said the number of travelers and total consumption in China during this year's Spring Festival, Qingming Festival, and May Day holiday have shown significant recovery compared to the same period of 2019. "Looking ahead, support from the Chinese government, such as subsidies for trade-ins of consumer goods, will lift retail sales growth in the months ahead," he added.

According to the National Bureau of Statistics, China's GDP in the first quarter grew 5.3 percent year-on-year, beating expectations. With spiking optimism over China's economy, DBS decided to raise its forecast for China's GDP growth in 2024 to 5 percent from 4.5 percent on the heel of the NBS data.

A report in April by the DBS Group Research pointed out that China's fixed asset investment in the first quarter was picking up, as government initiative aimed at equipment renewal in strategic sectors began to take effect.

Baig noted that due to China's steady economic growth, the country remains a popular destination for foreign investment. Furthermore, the scale and purchasing capacity of Chinese consumers remains a huge draw for global multinational companies.

Most global pharmaceutical giants have a substantial presence in China, and have expansion plans in mind, said Baig, adding that "global consumer goods producers are finding China very profitable for business. We also see those companies having big investment and expansion plans in China for years and decades to come."

Baig noted that as China is advancing the two-way opening-up of its financial sector, many international financial institutions including DBS are provided with more opportunities to tap into the Chinese financial market.

He said that as China is pushing for high-quality development, impressive innovation achievements have been made by Chinese enterprises.

According to Baig, China has become a global leader in terms of production capabilities and technology know-hows in electric vehicles, lithium batteries, solar panels and other products.

In the service sector, several cross-border e-commerce companies and financial companies have gained global recognition through innovation.

The expert expressed optimism on China's long-term growth outlook, highlighting that China has been heavily investing in education and R&D to boost innovation and create commercialized applications of the innovation in a cost-efficient manner.

"When we look at the kind of investment China is doing in educating its population, providing it with skills for the next round of technological waves, as well as the output by Chinese scientists, we are encouraged by the long-term potential of China," said Baig.