It is good to see that the Chinese government, having drawn many lessons from the
financial crisis in transatlantic countries triggered by the Lehman Brothers, has adopted
an innovation-driven strategy of pursuing high-end, intelligent and green growth
By Xin Ping
Recently, the Chinese government released economic data for the first five months of 2023, which indicated that China’s economy as a whole has continued its post-Covid recovery, even though the rebound in April and May was less than expected.
There comes the same old cliché: When the data of the Chinese economy are less satisfactory than forecast, concerns about China’s development prospects arise. This shows how the world’s second-largest economy matters to all as each of its subtle changes can affect the global economy.
However, we have to admit that for some “experts,” this is an opportune time to hype up China’s “sluggish” economy and lecture the public about its predictions regarding “China’s collapse.”
The best way to relieve a justified concern and refute a false argument is to offer facts and figures.
A robust growth momentum with low inflation
After three years of relatively slow growth, China’s economy has bounced back and continued to gain momentum since the beginning of 2023. Consumption and investment have picked up speed, and employment and prices have remained stable on the whole.
In May, total retail sales of consumer goods increased by 12.7 percent year on year, and catering revenue shot up by 35.1 percent, which shows that as life returned to normal in China, consumption once again became the most important driver of the economy. Given China’s huge population, the potential for consumption shall not be underestimated. Investment, too, is increasing in fixed assets, infrastructure and manufacturing.
More importantly, the rise of these two indicators hasn’t resulted in inflation as it often does in some developed countries. China’s CPI rose only 0.2 percent year on year, and the surveyed urban unemployment rate was 5.2 percent, down 0.3 percentage points from the previous quarter.
High-quality development based on a sustainable model
One exaggerated concern is that China lacks new growth drivers and that if the property sector becomes stagnant, the overall economy will be sucked down with it.
It is true that indulging in a fake boom created by a real estate bubble is dangerous. So it is good to see that the Chinese government, having drawn many lessons from the financial crisis in transatlantic countries triggered by the Lehman Brothers, has adopted an innovation-driven strategy of pursuing high-end, intelligent and green growth.
From January to May, the added value of aircraft, spacecraft and equipment manufacturing grew by 25.9 percent year on year. Information technology, big data and artificial intelligence have been widely used, and the production index of information transmission, software and information technology service industries has increased by 11.3 percent.
The green transformation continued to deepen, and the output of new energy vehicles, solar cells and charging piles grew by 37 percent, 53.6 percent and 57.7 percent respectively.
Resilient foreign trade
Foreign trade, as one of the three driving forces of growth, has been playing its role even during the Covid period. Trade relations between China and its traditional trading partners are solid, and China’s foreign trade structure is constantly improving.
The argument of China being “punished” by “decoupling” does not stand. On the contrary, it is precisely because of the fact that it is unrealistic to cut off from China that an increasing number of countries have discarded the concept of “decoupling.”
Let the data speak for themselves: In the first five months of this year, China’s imports and exports went up by 4.7 percent year on year, and its trade with countries along the Belt and Road expanded by 13.2 percent. China’s private enterprises accounted for 52.8 percent of the country’s total imports and exports, an increase of nearly 4 percentage points over the same period last year.
Bolstered international confidence
In June, the World Bank raised its forecast for China’s economic growth this year to 5.6 percent, up 1.3 percentage points from its January forecast. The International Monetary Fund (IMF) also predicts that China will achieve its growth target of 5.2 percent this year and contribute more than one-third of global growth.
The recently convened 14th Annual Meeting of the New Champions of the World Economic Forum (WEF) offered bountiful evidence of the confidence in China from international society.
WEF President Borge Brende said that 36 percent of world economic growth this year may come from China’s contribution, and that there are great expectations for further investment in China.
Business people around the world have cast a vote of confidence in the Chinese economy with loads of newly signed contracts and projects. According to a report by the European Union Chamber of Commerce in China, nearly 60 percent of the companies it surveyed plan to increase their R&D spending in China over the next five years.
For those who are not sure about China’s economy, Tesla CEO Elon Musk offered a way. “I encourage everyone to come to China to see for themselves,” he said. For those who find fault with China simply for the sake of criticizing, only the resilience, potential, vitality and bright prospects of China’s economy can silence them.
Xin Ping is a commentator on international affairs, writing regularly for Xinhua News Agency, Global Times, China Daily, CGTN etc. He can be reached at [email protected]. The views expressed in this article are those of the author and do not necessarily reflect the positions of Xinhua News Agency.