The Chi­nese Econ­omy: A Bullish Out­look for 2018

China Pictorial (English) - - News -

The World Bank raised its China 2017 eco­nomic growth fore­cast from a pro­jected 6.7 per­cent in Oc­to­ber to 6.8 per­cent in its China eco­nomic up­date on De­cem­ber 19,2017. The past year also saw the In­ter­na­tional Mone­tary Fund and the Asian De­vel­op­ment Bank rais­ing their out­look for China’s eco­nomic growth sev­eral times, which in­di­cates global op­ti­mism about the Chi­nese econ­omy.

In 2017, by deep­en­ing sup­ply-side struc­tural re­form, China achieved im­pres­sive re­sults in cut­ting in­dus­trial over­ca­pac­ity, de-stock­ing, de-lever­ag­ing, low­er­ing cor­po­rate costs, and bol­ster­ing ar­eas of weak­ness: China’s an­nual tar­gets for cut­ting ca­pac­ity in steel and coal in­dus­tries were sur­passed, com­mer­cial hous­ing for sale and cor­po­rate debt ra­tio con­tin­ued to de­crease, taxes and fees were cut by more than one tril­lion yuan (US$152.1 bil­lion), and in­vest­ment in weak sec­tors in­creased heav­ily.

The con­tin­u­ing re­form helps the Chi­nese econ­omy re­main sta­ble and gen­er­ates greater mo­men­tum for growth. In 2017, the Chi­nese econ­omy im­proved its qual­ity and ef­fec­tive­ness and be­came more vig­or­ous, as new busi­nesses and new in­dus­tries be­came stronger. These changes laid a solid ground­work for China’s long-term growth.

With its mas­sive scale as the world’s sec­ond largest econ­omy, China achieved steady growth in 2017 de­spite pres­sure brought by eco­nomic struc­ture trans­for­ma­tion and upgra­da­tion. In the first three quar­ters of 2017, the Chi­nese econ­omy grew by 6.9 per­cent year-on-year, about 0.4 per­cent­age points higher than its tar­get. The third quar­ter saw China’s GDP grow by 6.8 per­cent. The growth rate has re­mained be­tween 6.7 per­cent and 6.9 per­cent for nine con­sec­u­tive quar­ters.

From Jan­uary to Novem­ber 2017, 12.8 mil­lion new ur­ban jobs were cre­ated in China, 310,000 more than the same pe­riod in 2016. Mean­while, the Con­sumer Price In­dex rose 1.5 per­cent year- on-year, within the tar­get of about 3 per­cent. For the first three quar­ters in 2017, per capita dis­pos­able in­come in China rose by 7.5 per­cent year-on-year af­ter de­duct­ing the price fac­tor, which is higher than GDP growth rate.

China’s im­ports and ex­ports both main­tained dou­ble-digit growth, re­al­iz­ing a ba­sic bal­ance in in­ter­na­tional pay­ments. From Jan­uary to Novem­ber 2017, goods trade rose by 15.6 per­cent com­pared to the same pe­riod in 2016, of which im­ports rose by 11.6 per­cent and ex­ports 20.9 per­cent. China’s for­eign ex­change re­serves ex­ceeded US$3.1 tril­lion at the end of Novem­ber af­ter ris­ing for ten straight months.

The global eco­nomic re­cov­ery since the be­gin­ning of 2017 pro­vided a fa­vor­able ex­ter­nal en­vi­ron­ment for China to de­velop its econ­omy, while China has lived up to its rep­u­ta­tion as the en­gine and sta­bi­lizer of world eco­nomic growth. The United Na­tions re­cently re­ported that China con­trib­uted about one third of global eco­nomic growth in 2017. Over the past five years, China has con­trib­uted over 30 per­cent of world eco­nomic growth, top­ping all other coun­tries.

The Belt and Road Ini­tia­tive pro­posed by China has gained ex­ten­sive sup­port from the in­ter­na­tional com­mu­nity. An in­creas­ing num­ber of coun­tries and re­gions are tak­ing part in the con­struc­tion of the Belt and Road to de­velop their own econ­omy. Over the next 15 years, China will con­tinue to en­large its mar­ket. An­a­lysts es­ti­mate that China will im­port goods worth US$24 tril­lion, ab­sorb for­eign direct in­vest­ment of US$2 tril­lion and in­vest US$2 tril­lion abroad.

The an­nual Cen­tral Eco­nomic Work Con­fer­ence held in Bei­jing from De­cem­ber 18 to 20, 2017 drew a blueprint for China’s eco­nomic work for 2018 based on the cur­rent eco­nomic sit­u­a­tion. So­cial­ism with Chi­nese char­ac­ter­is­tics en­ter­ing a new era is herald­ing a new chap­ter for the Chi­nese econ­omy as it tran­si­tions from high-speed growth to high­qual­ity de­vel­op­ment. The Chi­nese econ­omy is ex­pected to show new vi­tal­ity and main­tain sta­ble growth in 2018.

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