China’s economy big enough to absorb Iran war shocks, says Justin Lin | South China Morning Post

VirtualRichDream · 2026-03-28T12:24:23+00:00

A prominent economist asserts that China can handle external shocks from the Iran war while achieving its economic growth target of 4.5 to 5 percent, despite potential global recession risks. Flexibility in domestic strategy is crucial for maintaining stability.

VirtualRichDream

2026-03-28 12:24:23

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China has sufficient capacity to absorb external shocks from the Iran war and meet its annual economic growth target, a prominent economist said, while adding it was also preparing for the possibility that Washington might renege on trade deals.

Justin Lin Yifu, dean of the Institute of New Structural Economics at Peking University and a former chief economist at the World Bank, said on Thursday that no country could be spared from the economic impacts of the conflict in the Middle East, which has sent global oil prices soaring.

“In the worst scenario, it may send the whole global economy into a recession, like the two oil crises in the 1970s,” Lin said on the sidelines of the Boao Forum for Asia in southern China’s Hainan province.

But the magnitude of the negative impact would differ for countries of different sizes, he said.

China had “enough space to offset, to moderate, the shock from outside and to maintain our development agenda”, Lin said, referring to this year’s economic growth target of 4.5 to 5 per cent, “as long as we can do things well domestically”.

The range-based growth target could provide flexibility in responding to external uncertainties, Lin said.

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