Recently, the sharp fluctuation of global markets have caused uncertainty in the world economic recovery. China, the world’s second largest economy, also witnessed new challenges facing downward economic pressure. Despite the difficulties, China’s economy operates positively within an appropriate range, injecting confidence and hope into the world economy.
China’s economy is developing within an appropriate range
During the past eight months, China has witnessed stable growth while at the same time securing progress in its economic development.
The added value of large-scale industries has seen a year-on-year growth of 6.3 percent, equaling last year’s growth. 7.18 million jobs have been added, accomplishing 71.8 percent of this year’s target.
Other economic indicators have also increased as total retail sales of consumer goods, sales of commercial housing, and the consumer price index gained a year-on-year growth of 10.5 percent, 15.3 percent, and 1.4 percent respectively.
With relatively stable growth, China’s economy also has several new features.
The service industry continues to grow as its added value saw a 8.4 percent year-on-year growth, accounting for 49.5 percent of gross domestic product.
Consumption serves as a strong stimulator as it results in a 4.2 percent point in GDP growth.
Efforts in energy-saving and cost-reducing have paid off as the clean energy consumption has witnessed a 1.6 percent growth compared with the same period last year, accounting for 17.1 percent of total energy consumption.
New industries are developing fast as the added value of the high-tech industry and sales of the online retail industry have seen year-on-year growth of 10.4 percent and 35.6 percent respectively. The development of tourism and culture industries has also sped up.
Mass entrepreneurship and innovation have achieved a good momentum. According to statistics, newly-registered enterprises nationwide witnessed a 19.4 percent year-on-year growth in the first half of 2015.
Engine of the world’s economic growth
In addition to its domestic growth, China is also the engine of the world’s economic growth. Compared with a 2.0 percent growth rate in the world’s GDP from 2009-2014, the average GDP growth of China reached 8.7 percent. Even in the first half of 2015, when economic growth was slowing down, China was still one of the fastest-growing major economies of the world, serving as a stabilizer of the world economy as it contributed to 30 percent of the world’s economic growth.
With the largest manufacturing industry and consumer groups, China is an active importer of the world as imports of grain, cooper ore, and crude oil have witnessed year-on-year growth of 24.4 percent, 12.1 percent, and 9.8 percent respectively from January to August. The value of imports from Asia, Africa and Latin America in 2014 accounts for nearly 20 percent of these regions’ export value.
As income levels improved, more and more Chinese people are traveling and shopping abroad. China’s overseas tourist consumption ranks number one in the world. In 2014, it surpassed 1 trillion yuan with a 30 percent year-on-year growth.
China’s foreign direct investment is also speeding up as it invested $123.1 billion with a year-on-year growth of 14.2 percent in 2014. China’s One belt and One Road initiative also accelerated its efforts in foreign direct investment as it has invested $10.7 billion with a 48.2 percent year-on-year growth in countries along the “belt” and “road”.
Prospects for China’s economy
After 30 years’ high-speed growth, China’s economic growth rate is slowing down. Market conditions and economic structural problems play a part in dragging down the economic growth rate.
The sluggish world economy, sharp drop of prices in international commodities, and quantitative easing policies of major developed countries also contribute to the slowing down of China’s economic growth.
Despite of the difficulties, the prospect is still promising as China is making efforts to make economic structural adjustments and upgrade its economy.
In the future, according to estimation, China will have a 300 million population of a middle-income group which means mass consumption will create a larger and more mature market to benefit industries home and abroad.
Upgrading of traditional industries will offer more opportunities to the world as China has a huge need in high technology and high-end equipment.
The service industry will have a great market potential. It is estimated that the scale of the industry will reach to $12 trillion in 2025 if it developed at the current growth rate.
Furthermore, international capacity cooperation will also help to create more opportunities for the world as China, with its capacity in manufacturing and engineering, plays a positive role in bridging the development of developing and developed countries.
The author is Wang Baoan, director of the National Bureau of Statistics.