Spillover effects of US interest hikes exacerbate world financial turmoil

China is expected to maintain stable economic growth featuring high-quality development, and through this to make more contributions to the world economy, according to experts participating in the 88th International Forum on China Reform, which concluded on Sunday.

They also said that due to a cluster of factors including the pandemic, the limited policy room in many economies and poor macroeconomic policy coordination among countries, the global economy has become more sluggish.

Xie Fuzhan, a member of the Chinese Academy of Social Sciences, or CASS, said the risks of global economic operations are accumulating amid the lower-than-expected pace of global economic growth, the slowdown in global trade, limited policy tools for many countries to deal with an economic downturn, and some countries' adoption of unilateralism and protectionism that disrupt global economic governance.

Those risks in particular include the spillover effects of the US interest rate hikes, which have pushed up the risk of a US economic recession and exacerbated global financial turmoil to jeopardize global economic recovery and may possibly trigger financial crises in some countries, said Xie, who is also deputy director of the Committee on Economic Affairs of the National Committee of the Chinese People's Political Consultative Conference, the nation's top political advisory body.

According to estimates from the International Monetary Fund in October, global growth is forecast to slow from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023.

Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than has been seen in several decades, the IMF said.

Experts on the forum — held in Haikou, Hainan province, and online — said China is expected to play an increasingly crucial role in driving regional and global economic recovery, as the country deepens reform and expands high-standard opening-up while pursuing high-quality development against all odds.

According to Zhang Junkuo, former deputy head of the Development Research Center of the State Council, China has a solid development foundation and distinct advantages in the supply and demand systems.

With a continuously optimized business environment that is increasingly more competitive and attractive, China will be able to form a stronger development advantage to turn crises into opportunities, and achieve better development, he said.

Zhang expects China to expand its efforts in building a market-oriented, law-based and internationalized business environment while increasing policy consistency, enhancing policy coordination, boosting market confidence and improving understanding of new policies.

Peng Sen, president of the China Society of Economic Reform, said the real economy in China is facing some difficulties against the backdrop of a downturn in the pace of China's economic growth since last year, and the country is expected to focus on reinforcing the real economy with key measures, including supporting the development of the private sector.

If the problems facing the real economy are addressed with market-oriented reforms, the realization of stabilizing growth, market entities and employment will be guaranteed, Peng said.

Xie, who is also the president of the Presidium of Academic Divisions of CASS, said China is expected to further consolidate the long-term upward economic momentum and inject more stability, certainty and positive factors into the world economy, as it continues to leverage its supersized market, strong economic resilience and huge economic potential, and cope with challenges more proactively to continuously enhance the domestic circulation and expand high-level opening-up to improve the international circulation.