Here’s how to improve on a 100 trillion yuan economy

China was the only major economy to see positive growth in 2020, with the gross domestic product exceeding 100 trillion yuan ($15.46 trillion) for the first time to reach 101.6 trillion yuan, up 2.3 percent over the previous year in comparable prices.

However, this splendid performance was not beyond expectation. After all, although it must still contain sporadic clusters of infections, China has taken the lead in curbing the spread of the novel coronavirus and resuming production and business by making use of its institutional advantages and tapping the driving force of its domestic demand based on its national conditions.

However, the country must conduct a structural analysis of its economic growth so that it can build on the past experience and grasp the development path in 2021.

Given that structural policies played a big role in China realizing positive economic growth in 2020, smooth policy transition is needed to consolidate the achievements and create new ones. China has implemented a combination of policies aimed at stabilizing investment, consumption and expectations. For example, it has intensified investment efforts, giving full play to the key role of investment in driving growth, and timely adjusted the policies not conducive to stabilizing consumption. At the same time, it has fully seized a window of opportunity to promote its export growth.

While bidding farewell to the extraordinary year of 2020, China should be well aware that emergency policies cannot help it to realize long-term goals. To maintain the resilience and sustainability of economic growth, it needs to fundamentally improve the business environment and make the market more attractive. Therefore, in 2021, it should adjust policies in a timely manner, stabilize market expectations and strengthen the attractiveness of the system based on changing global economic circumstances.

For encouraging investment, the country should shift from stabilizing growth to stabilizing the economic system, and rely more on stable taxation, industrial and regulatory policies. In terms of guiding consumption, instead of adopting stimulative consumption policies it should turn to consumption upgrading, green consumption and healthy consumption. When it comes to import and export, it should adhere to the principles of fair competition in the global industrial and supply chains and safeguard its development interests.

At the same time, it needs to take bold measures to build better multilateral and bilateral mechanisms, enhance the connectivity of domestic and international circulations, and upgrade the global industrial and supply chains.