after years of sidelining its economy as rigid anticovid policies trumped all else china seems at least on paper set for a robust 2023 investors and analysts see a promising landscape for several reasons last year’s weak growth should provide a low baseline for comparatively rapid expansion removing the crushing first year of the pandemic china’s economy in 2022 likely grew at its slowest rate in nearly 50 years second policy makers in recent weeks have hammered home that the economy is now priority no 1 at last month’s top annual economic summit president xi jinping and other leaders promised that a steady and ongoing economic recovery would kick off this year with ample government support on thursday china’s finance ministry said it would accelerate spending to boost growth particularly in tech and other nationally strategic sectors other measures such as tax cuts for businesses and issuance of special bonds to fund targeted projects alongside increased fiscal transfers to local governments are to be rolled out as well the ministry said most important in reviving china’s beleaguered economy however is last month’s sudden dismantling of “zerocovid” measures that have crippled business activity for more than a year it is “certain” that china’s economy will recover this year said lu ting chief china economist at nomura ”the question is how much” yet for beijingbased economist michael pettis a senior fellow at the carnegie endowment what matters most is which parts of the economy grow and which the government chooses to stimulate for him any rebound is only significant through healthy domestic demand namely consumption and business investment and how sustainable that demand becomes “analysts must stop interpreting chinese economic data in the same way they interpret data from other countries in china where so much growth is driven by softbudget spending gdp does not mean what it means abroad where most spending is limited by hardbudget constraints” he said whether china moves to permanently shift the structure of domestic demand will determine if this year’s economy regains its health “and more importantly how costly china’s longerterm adjustment is likely to be” pettis said policy makers may finally be moving in that direction at last month’s summit chinese leaders stressed that expanding domestic demand was vital and for the first time prioritized consumption higher than investment and infrastructure part of stimulating domestic spending will be allaying rattled consumers who have been saving rather than buying amidst the uncertainty of last year’s covid restrictions and the losses of jobs and businesses stimulating consumer confidence and domestic demand will lead beijing’s economic policies this year china international capital corp 3908 said in a recent note the investmentmanagement firm said various short and longterm policies will be rolled out to stabilize the sector china faces a few caveats for its recovery hopes however the explosion in covid cases since it opened up is ongoing and the death toll and pressure on the healthcare system are clouded by the communist party’s characteristic lack of transparency in releasing data and other potentially sensitive information moreover economists are predicting a potentially sharp global slowdown this year with the chance of recessions in the us and europe which would dampen trading with and investment into china and with covid restrictions largely out of the way the longstruggling property market has returned as the economic elephant in the room while the sector is suffering a record contraction with every subsector from housing to commercial property in distress new credit data offers a glimmer of hope said shehzad qazi managing director of consultancy china beige book “borrowing and bond sales are picking up which suggests the much talked about policy turn may finally be approaching” he said in an emailed statement “but forget a return to days of old it will take considerable policy support in 2023 just to pull property out of the gutter”