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The secret to China’s economic stamina amidst a trade war
BEIJING, Aug. 4, 2018 (BSS/Xinhua) – To put forward a bearish forecast on
China’s economy is easy, requires little effort, and attracts considerable
attention, but to make convincing and reliable predictions is more of a
challenge.
It demands enormous insight into China’s internal economic logic and
foresight to look through short-term fluctuations — the qualifications that
not every predictor possesses.
That’s why there are so many naysayers, particularly when the country is
grappling with economic headwinds amid a trade row.
The fact is the Chinese economy has held up despite a less favorable
global environment and appeared more endurant in a U.S.-ignited trade war.
The Trump administration, on the contrary, keeps threatening to escalate
tensions, regardless of domestic and international opposition.
In the latest sign of China’s undented confidence, policymakers vowed to
keep the economy on “a stable and healthy development track” at a meeting of
the Political Bureau of the Communist Party of China (CPC) Central Committee
earlier this week.
Unchanged, solid fundamentals serve as the foundation of China’s long-term
economic stability.
China’s economy expanded 6.8 percent in the first half, performing in the
medium-high speed range for 12 consecutive quarters. Unemployment and
inflation were tame, and consumer spending contributed 78.5 percent to GDP
growth. The CPC has demonstrated its wisdom and ability to control
complicated situations, observers said.
After decades of high-speed growth, China is now turning to high-quality
development that is more efficient, balanced and sustainable.
Services are playing an increasingly important role in the economy. High-
tech industries and equipment manufacturing, dubbed as new driving forces,
are booming.
China’s untapped potential solidifies its economic resilience.
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The country boasts a population of nearly 1.4 billion people, a labor
force of 900 million workers, and more than 100 million market players.
Urbanization and rural vitalization are unlocking a tremendous market demand.
A research by the National Bureau of Statistics found that the average
annual contribution rate of domestic demand to economic growth stood at 105.7
percent in the past decade.
Continuous reform and opening up is China’s trump card. China owes its
success over the past decades to reforms that unleashed its people’s
potentials and the inflow of technology, talent and ideas as it steps out of
isolation and embraces the world.
The government has pledged further reforms to improve the business
environment and wider opening up. The Belt and Road Initiative and the first
China International Import Expo scheduled for November show its determination
to seek win-win cooperation with other countries.
Given protracted trade frictions and domestic structural problems, it is
reasonable to expect difficulties ahead for the Chinese economy and its
businesses. However, doubters should not underestimate a country that has
achieved what was once seen as impossible, and is determined to bring success
for decades to come.
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