China Briefing | As China’s growth headwinds gather speed, Beijing must consider cash handouts to sustain ‘common prosperity’ drive
- While the government has put on a brave face as economic storm clouds gather, retail and household income figures suggest the nation’s leaders are being too optimistic
- Authorities have thus far focused on boosting production, but sustaining the much-touted ‘common prosperity’ drive might require direct subsidies to those most in need
China may have reported stronger-than-expected economic expansion in the first quarter of 2022, but pessimism about the outlook for the coming quarters, and even the whole year, is worsening – for good reason.
In the first three months, the world’s second-largest economy grew by 4.8 per cent compared to the same period last year.
That growth rate may be slower than the government’s set target, but it is higher than the 4 per cent rate it grew in the last quarter of 2021 as well as the estimates of economists.
Consequently, tens of millions of residents were quarantined at home, factories and businesses closed and supply chains severely disrupted.
Beijing has thus far put on a brave face. Since Monday, authorities have directed state media to publish a barrage of commentaries and analysis pieces that argue that China’s economic fundamentals remain strong, with its resilience and vitality intact.
