By Ji Peijuan from People’s Daily
As the annual “two sessions” begin in early March, China will, at the starting year of its 13th Five-Year Plan period, embark on a new round of promising development, refuting those bearish voices on Chinese economy.
Dubbed the two sessions, the Chinese People’s Political Consultative Conference (CPPCC), the country’s national advisory body, will open on March 3, and the meeting of the National People’s Congress (NPC), the top legislative body, will begin on March 5.
After some claimed they would “short sell” China at the Davos World Economic Forum at the beginning of this year, some hedge funds have bet on an extreme drop in China’s currency.
However, those bearish views failed to hold water since the Chinese economy neither encountered a “hard landing” or “a cliff-like drop.”
A report released by China’s National Bureau of Statistics (NBS) revealed that China’s average annual economic growth hit 9.8 percent from 1979 to 2012. Thanks to increasing economic aggregate, the GDP increment in 2015 reached 4.1 trillion yuan ($626.9 billion), surpassing the total 3.6-trillion-yuan GDP volume in 1993.
Even after China’s economy entered into the “new normal” phase, during which it will focus more on the quality of economic growth rather than quantity, it maintained a medium-high growth rate. This fact suffices for market confidence.
Chinese President Xi Jinping, when attending the 10th G20 Summit last November, also noted that China has the confidence and ability to sustain a medium-high growth rate and continue to create development opportunities for other countries.
China’s confidence comes from its determination and actions to comprehensively deepen reform and build an open economic system, as well as the strong endogenous dynamic of China’s economy and the policy guidance of the Chinese government, as Xi said.
China’s remarkable achievements also consolidated such confidence. It not only maintained a moderate but stable and sound growth while comprehensively deepening reform, but also optimized its economic structure.
Moreover, people’s living standard is improving and society is generally stable. What’s more impressive is that in 2015, the Chinese economy contributed over 25 percent to the growth of the world economy.
In addition, the economic structure adjustment in China has already paid off. In 2015, the added-value of the tertiary industry accounted for over 50 percent of the country’s GDP.
Environmental pollution is under effective regulation as well.
Consumption is contributing more to economic growth. Last year the figure stood at 66 percent of growth.
Moreover, bullish views on the Chinese economy still dominate the global market.
Liu Ligang, chief economist for Greater China at Australia & New Zealand (ANZ) Banking Group, said that trade data indicates that China’s economy is transforming into a consumption-driven mode.
He explained that its net exports have significantly dropped in GDP growth stimulation while in import structure, the total amount of general trade is about twice as much as that of processing trade.
China’s economy is transforming from being investment- and manufacturing-driven to a domestic demand- and service-led mode. Such transformation will make China a more sustainable growth engine for demands, which is conducive to world economy, Stephen S. Roach, a faculty member at Yale University and former Chairman of Morgan Stanley Asia told the People’s Daily.
“China will eventually realize its reform goal of the ‘new normal’ and Chinese consumers will become a driving force for it. They will also further expand global demand,” Roach added.