BEIJING — China’s economy has defied doom-mongers again in 2018, and economists believe there are good reasons to remain confident.
Although latest economic indicators revealed signs of stress, as industrial profits posted their first drop in three years and consumption growth missed expectations in November, merely focusing on short-term fluctuations will miss the big picture of the economy.
China’s tone-setting economic meeting described problems facing the economy as part of development, noting that the country is still and will be in an important period of strategic opportunity for development for a long time to come.
Despite downward pressure from the Sino-US trade frictions, a rebalancing and deleveraging domestic economy and monetary tightening in certain developed economies, China has maintained stable economic growth, offering certainties to a world mired in uncertainties.
Its GDP rose 6.7 percent in the first three quarters of 2018, putting the economy on track to meet the government’s targeted growth of around 6.5 percent set for 2018.
Niu Li, an economist with the State Information Center, a government think tank, said the economy is highly likely to rise 6.6 percent this year.
This means China remains a top performer in the global economic arena, with the IMF forecasting growth of 2.4 percent for advanced economies this year.
The Sino-US trade frictions have been properly dealt with. Employment remains stable, consumer inflation is kept at a mild level, resident income continues to grow steadily, while development is more balanced and sustainable with higher quality.
Consumption is set to contribute 78.2 percent of China’s economic growth this year, the highest level since 2001, according to a report released by the Chinese Academy of Social Sciences this month.
“We expect consumption to remain the largest driver of the economy in the next decade,” said Ding Shuang, an economist of the Standard Chartered Bank, citing great potential consumption to continue to grow faster than investment amid the ongoing trends of urbanization, aging and a rising middle-income group that demands quality goods and services.
While consumer spending contributed a bigger share of GDP growth, technology and innovation are picking up the slack as certain traditional industries took a hit.
High-tech manufacturing and equipment production sectors maintained fast expansion. In the Global Innovation Index 2018 by the World Intellectual Property Organization, China became the first middle-income economy on the list of the world’s 20 most innovative economies this year.
The medium-high level of growth achieved during the past year exhibited the vitality and resilience of the Chinese economy, which will ensure its future stability, said Liu Qiao, head of the Guanghua School of Management at Peking University.