Despite mounting scepticism, if China can shake off its Covid restrictions and Beijing adopts helpful monetary and fiscal policies, the world’s second largest economy may yet make its 5.5% GDP growth target for 2022.

If it pulls this off, how would it compare with other countries in the developed and developing world?

Based on recent history 5.5% growth is below the long-term trend. Between 1989 and now, China’s annual GDP growth has averaged 9.2%.

Growth had already begun to slow as the economy matured before the pandemic, with 5.9% posted in 2019. China is transitioning from an economy dominated by exports to one which is driven more by domestic demand. The year Covid struck growth slowed to 2.2% before rebounding with an 8.1% surge in 2021.

While 5.5% might feel a bit disappointing in that context it would put China near the top of a global league table based on the latest forecasts from the IMF (International Monetary Fund).

If China only achieved the 4.4% rate expected by the IMF, this would still rank reasonably high and well above the 3.3% average for advanced economies and even the 3.8% average for emerging market and developing economies. India stands out with growth of more than 8% pencilled in.

Even if growth is as low as 4%, as some observers are now predicting, it would still be an outcome which would be the envy of much of the globe.

This outlook is part of a series being sponsored by Templeton Emerging Markets Investment Trust. For more information on the trust, visit here.

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