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Foreign media’s outlook on China’s economy

Updated: Dec 19,2016 12:19 PM’s Daily

“Those China bears may be disappointed now,” read a recent comment from Singapore’s The Straits Times.

As the end of 2016 is around the corner, foreign media are writing reviews and outlooks on China’s economy, expressing their hopes and concerns.

“Despite many doubts, China’s GDP still, for the third consecutive quarter, rose 6.7 percent, and Producer Price Index (PPI) is rebounding,” Bloomberg reported.

Fortune, a US new magazine, and Reuters, both estimated that China will reach the goal of 6.5 percent to 7 percent annual GDP growth. “Data shows that China’s economic reform and stimulus policies are working,” said Fortune.

China’s promising economic data is echoed by the rebounding of world major economies. According to Wall Street Journal, the Organization for Economic Cooperation and Development (OECD) recently estimated that major developing and developed economies such as UK and France all have shown signs of accelerating growth.

Some media also have been trying to understand what is driving China’s growth.

German news network ZDF said that China’s economic data fits the goal of its new policies aimed at changing the economic structure. “China’s new economy is more driven by innovation and personal consumption, instead of exports,” it said.

The huge investment in R&D by Chinese companies and government also warranted attention. According to a recent Wall Street Journal article, when research budgets are limited in the West, China is injecting huge funds into many cutting-edge research projects as part of the mission to become less dependent on foreign companies for core technologies.

The Wall Street Journal cites data from OECD that says China’s R & D expenditure has surpassed Japan and Europe in 2009 and 2013, respectively, and will probably catch up with the US by 2020.

Thanks to investments in research, China is moving up the supply chain with higher quality of standards for products and services, Singapore’s Straits Times said. In 1995, shoes, toys and clothes were among the top exported products for China, and in 2015, products with the highest export volume changed to telecom devices, auto-data processors and picture tubes.

Foreign media also reported on future risks.

Bloomberg said China’s economy still has many problems, such as excess capacity and financial risks. It suggested China should set up an effective mechanism to ensure a healthy development of the real estate market.

Reuters cited a report from UBS that said China’s real estate market will probably fluctuate in the next two years, and the renminbi is still facing the pressure of depreciation.

As for the future, many experts agree that China’s economic development will be beneficial to most countries. Stephen Roach, a professor at Yale University and former chief economist at Morgan Stanley, said that China has the plan, money and commitment to actualize a successful economic transformation and become a consumer society, and it can avoid periods of crisis.

“I think, without the drive of China’s economic growth, the world economy will be in trouble. So China bears need to be more cautious when uttering concerns,” he said.