China's GDP growth is likely to hit 8% in 2021, with a projected 3.7% growth in Q4, said the Peking University, HSBC Business School (PHBS) Think Tank recently.
According to the PHBS Think Tank, the downward pressure on China's real economy is still high in the fourth quarter, pointing to weak consumption, a significant decline of investment in infrastructure and real estate, and CPI upward pressure.
Since the prices of some upstream raw materials are still at high levels, the rise in the prices has begun to be transmitted to the middle and downstream products, the think tank added.
Due to triple pressure from demand contraction, supply shocks, and weakening expectations, China's GDP growth rate is expected to be 5.0% in 2022, the think tank noted.
The slowdown in the property market and consumption in China is expected to continue acting as headwinds to the growth of the world's second largest economy, PHBS predicted.
The think tank estimated that a 10% decline in real estate investment will lead to a 2.1% decrease in GDP growth, causing the loss of 6.85 million jobs in the related sectors.
As the omicron variant, persistent supply chain disruptions, and inflation pressures are constraining the global economy's recovery from the pandemic, some of the factors supporting China's exports are expected to be weakened in 2022, the think tank said.
In addition, PHBS estimated that the contribution to China's GDP from consumption, investment, and net export will be 1.9 percentage points, 1.7 percentage points, and 1.4 percentage points respectively.