China confirms GDP 2022 +5.5%

China confirms the target of GDP growth in 2022 at 5.5%, Premier Li Keqiang announced on March 5 at the opening of the National People's Congress.

The figure is higher than the estimate of the International Monetary Fund, which in its January report forecast China's growth in 2022 at 4.8%, and the World Bank, which forecast 5.1% for China, 4.4% for global growth, 4% for the United States, 3.9% for the eurozone and 3.8% for Italy.

The 2021 growth figure is confirmed at 8.1% in line with the forecasts published by various international bodies; in addition, the Premier has set the objective of 11 million new jobs in urban centers by 2022, unemployment at 5.5% and control of inflation with a consumer price index (CPI) at 3%.

The National People's Congress will also present new strategic guidelines for the country's economic development. In recent years, China has introduced various measures to facilitate investment from abroad and to reduce the impact of the health emergency. Despite the pandemic, in 2020 China has become the main destination of FDI (foreign direct investments) and 2021 has been confirmed as a positive year for foreign investments in China: according to data released by the Statistical Office and the Ministry of Commerce, in 2021 with new foreign investments at +24% compared to 2020. In terms of capital, FDI flows from abroad amounted to $173 billion, +20% compared to 2020.

In 2020, the new Foreign Investment Law came into force, equalizing the treatment of entities with foreign capital to those with domestic capital, with a significant impact on the operation of joint ventures, whose governance will be much more similar to traditional WFOEs.

Other measures include reducing the number of sectors included in the negative lists, for example in the automotive sector, and the introduction of measures aimed at reducing the fiscal impact. For example, Beijing has extended the non-taxability of certain allowances received by foreign workers, introduced taxation at 15% for foreign talent in Guangdong and Hainan, a special tax rate for technology companies and regional hubs for large multinationals.