Illustration: Chen Xia/Global Times
Last week, some international investment banks including Goldman Sachs and Morgan Stanley raised their forecasts for China’s economic growth in 2024 to around 5 percent, as they believe the country’s vibrant manufacturing sector led by high-tech innovation will offset the negative impact caused by a prolonged real estate market correction and other temporary difficulties.
However, at the same time, there are a number of organizations and media pundits in the West who continue to cast a cloud over China’s development. For instance, ratings agency Fitch last week moved to downgrade the country’s sovereign credit outlook to negative, citing local government debt and slowing growth. It is very likely that in the coming months global organizations will be divided in their projections about the speed of the country’s development.
But China is almost certain to remain the largest growth engine for the global economy over the coming 10-20 years, and the country’s resolve to achieve around 5 percent GDP growth this year will be realized, forged into reality by the hard work of the Chinese people. If the history is mirror, the perseverance, resilience and creativity of the country will be put into full display, even in the face of global headwinds.
The Chinese government’s proactive pro-growth policies will help mitigate the impact of factors like slower property sales and rising trade protectionism in the West. Although the US-led technology restrictions targeting China will continue to act as a roadblock to negatively impact China’s growth, the country’s blossoming domestic technology innovations, particularly in green new-energy, digital devices and smart tools and robots manufacturing, will catapult the country to a new level of strength and competitiveness before 2030.
It is widely projected China’s economy in the first three months this year will expand by over 5 percent, on the back of strong domestic consumption and exports. In the first two months of 2024, total retail sales of consumer goods reached 8,131 billion yuan ($1,124 billion), up by 5.5 percent year-on-year, while the export of goods rose by 7.1 percent. The export figure dipped a little bit in March due to seasonal factors. In addition to surging electric vehicle exports, the value of China’s semiconductor exports rose by nearly 20 percent year-on-year in the first three months this year, which manifests the rapid rise of China’s homegrown technologies.
By all metrics, the country’s post-pandemic economic revival has continued to gain pace. The giant Chinese economy is “obviously going to be important” for the Asia-Pacific region and the world, ADB’s chief economist Albert Park said last week. Meanwhile, Goldman Sachs said it decided to raise its projections of China’s year-on-year growth this year due to the country’s distinct manufacturing strength. As the time goes by, China’s high-tech manufacturing will be unparalleled in the world.
The Chinese people have full confidence in the country’s ability to overcome the temporary difficulties the economy now faces and to realize an around 5-percent economic growth rate. It is important for the country to always focus on nurturing strategically important new industries, research and development of new technology and creating highly-efficient new business models to ensure China is always a technology leader and a forward-looking pacesetter on this globe.
In 2024 and beyond, capital investment will always act a strong arm of China’s development. The ancient Chinese proverb “Want to be rich? Build roads first” still prevails. In addition to expressways and high-speed railroads, the country should continue to ramp up investment in other infrastructure, such as building up to a dozen smarter city clusters that are linked with ever faster intercity transport systems, 5G mobile networks, and modern supply chains and strong human resource back-ups. Higher public and private investments need to be channeled to fostering strategically important new industries, namely solar panels, wind turbines, nuclear power generators, giant energy storage batteries, smarter electric vehicles, high-standard robotics, high-end semiconductor chips, and advanced AI solutions that will guide every aspect of manufacturing, services and decision-making. In addition to extending China’s own roads, ports, bridges, railways and subways, the country should unswervingly promote other countries’ infrastructure projects, particularly in the Global South, under the globally-acclaimed and ever-expanding Belt and Road Initiative. When the basic facility in Global South is improved, their people will have access to more opportunities and gradually become better-off, and they are poised to engage in growing trade with China. Boosted by a series of ground-breaking tech innovations which recently have been focused on the new-energy industry, Chinese-produced goods are now increasingly welcomed in the world.
Currently, the country possesses the right conditions to implement a looser and more dynamic monetary policy and a proactive fiscal policy so that more money could be used on infrastructure and technology innovation. China’s consumer price index rose merely 0.1 percent in March year-on-year, in contrast to the US’ elevated 3.5 percent. The trivial inflation warrants the policymakers to continue to cut interest rates so that more money could be borrowed from the banks on China’s infrastructure, manufacturing sector upgrade, and loaned to households for spending.
China’s latest policy aimed at bolstering domestic demand with tentatively choreographed government incentive packages for factory equipment upgrades as well as consumer product trade-ins will produce a greater positive effect on economic growth.
Provided China continues to focus on technology innovation, foster new quality productive forces, and remain committed to its opening-up policy and inclusive development with the Global South, the country will continue to lead the world in economic development. Chinese people should not be distracted by the Western naysayers who keep disparaging the country. The boat of Chinese economy is to sail in both sunny and stormy seas. The growth is unlikely to reach its “peak” any time soon. It will never “capsize” or “collapse” as the naysayers have long predicted.
The author is an editor with the Global Times. bizopinion@globaltimes.com.cn
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