(Yicai Global) Dec. 21 -- China’s economic fundamentals are basically unchanged, according to experts at the Shanghai Academy of Social Sciences, leading them to take an “optimistic and confident” stance on the outlook for the world’s second-largest economy despite headwinds.

China’s economy will further recover next year, which will be the third year of the Covid-19 pandemic, Wang Zhen, vice president and researcher at the SASS, said yesterday at an academic salon. The country will seize opportunities and implement forward-looking policies as the economy is resilient, national governance is mature, and the mechanism to deal with challenges is both flexible and effective, he added.

Last month Premier Li Keqiang warned of downward pressure on the economy. China’s economic development is facing pressure from shrinking demand, supply shocks, and weakening expectations amid the global pandemic. In a bid to support growth as the economy slows, the People’s Bank of China cut its lending benchmark, the loan prime rate, for the first time in 20 months yesterday, and it is likely to further trim the LPR next year, according to analysts.

But China enjoys advantages that many countries do not have in market size, manufacturing capabilities, and government system, said Sun Lixing, director and researcher at the International Investment Research Office under the SASS’s Institute for the World Economy. The country is also fortifying its finance, technology and other fields, he noted.

The nation faces a changing environment and arduous economic and social development tasks, but the practice of seeking progress while maintaining stability has not changed, Sun said. Consumer demand has not been fully unleashed, investment appetite is lower than market expectations, export growth is slowing, and an imbalance in supply and demand persists and needs addressing, he added.

The Yangtze River Delta region, which embraces Shanghai, southern Jiangsu and northern Zhejiang provinces, will play a greater role in China’s economic development, Wang said, noting that the region’s contribution to economic output rose to 24.3 percent in the first three quarters of this year from 24.1 percent last year amid good export momentum and big infrastructure investments. The region will expand domestic demand, enhance the vitality of market players, and further open up, he added.

Editor: Futura Costaglione