The increasing influence of China’s capital market reflects the country’s significant role on the global stage, said observers, predicting that more growth points will spring up in the Chinese economy and create abundant business opportunities, with positive macro policies and reforms being pushed forward.
The comments came after recent fluctuations in the domestic capital market, and the various degrees of turmoil in financial markets in Indonesia, Malaysia, the United States and Europe.
Sustainable transformation and upgrading
“China has already become the world’s second-largest economy, with unprecedented close connection with the global financial market. This might intensify the market fluctuations, but people are actually not that panicked,” Zhang Tiegang, a professor from the School of Economics at Central University of Finance and Economics, told People’s Daily.
Statistics from the National Development and Reform Commission showed that China’s economy this year is running at a stable pace and will improve despite the current complexity and difficulties, as economic transformation and upgrading is being promoted in a sustainable way.
For example, consumption accounted for 60 percent of economic growth in the first half of this year, 5.7 percentage points higher than a year ago; also in the first half, the number of the nation’s newly registered enterprises increased 19.4 percent, with an average of 11,100 registered every day.
Yang Song, director of the Economic Research Institute at Beijing Academy of Social Sciences, also told People’s Daily that there is no need to be over-worried about the downward pressure of China’s economy, as it is inevitable during the transformation period.
“The engines of economic growth are still strong in various areas, and many regions are even trying to find the new growth point,” Yang said.
Effective introduction of policies
Policies and measures such as timely and effective cuts in interest rates and banks’ reserve-requirement ratio, and the establishment of a joint inter-ministerial conference system to promote mass entrepreneurship and innovation have contributed to the glimmering signs of improvement in the country’s economic fundamentals.
This month alone, the State Council held two executive meetings, one seminar and introduced seven policy documents about economy-related issues, covering areas such as foreign trade, innovation and entrepreneurship and tourism consumption.
According to Zhu Baoliang, director of the National Information Center’s economic forecast department, the portfolio of reform measures and macro policies has brought changes to the market environment, enterprises and individual behaviors, vitalized the capital market, energized innovation, and enabled an obvious role for financial and monetary policies in boosting demand.
All these factors have helped to relieve the downward pressure, Zhu said.
Lu Suiqi, deputy director of the China Financial Research Center at Peking University, said, “The benefits of every single policy that was introduced are obvious for related industries. However, we should pay equal attention to the connection among the policies and their implementation.”
Confidence in long-term improvement
“China is gradually losing its demographic dividends,” is one pessimistic statement about the Chinese economy.
However, experts said the evaluation of an aging population’s long-term impact on the economy should not be too arbitrary.
According to Yang Song, studies have found that China’s aging challenges are looming, and big cities such as Beijing are mainly dependent on the influx of migrant labor. As a result, many senior citizens couldn’t find nursing help during Spring Festival.
Yang said both an adjustment in population policies and elements such as increasing labor productivity and technological improvement should be considered when analyzing the aging problem’s future impact.
It is likely that China’s economy will maintain a mid-to-high growth rate for quite a long time in the future, Yang said.
“In fact, many international organizations such as the International Monetary Fund believe that China could meet this year’s economic growth target. Moreover, economic recovery in Europe and the US will help to create a good external environment for China,” Zhang Tiegang said.
Lu Suiqi said the pressure faced by traditional industries during adjustment and the challenges faced by emerging industries will be important variables that test the future performance of the Chinese economy.