By Wu Qiuyu
China saw its economy continue to recover and its key economic indicators continue to move in a positive direction in May, which is a hard-won result considering the rampant COVID-19 worldwide and the shrinking international economy and trade.
According to statistics released by the National Bureau of Statistics and the Ministry of Transport, the total profits made by industrial enterprises above the designated size, the index of services production, and China’s fixed-asset investment in transportation began to increase. Besides, power consumption of the service sector and rail-cargo volume were also on a rise.
The strong performance of China’s economy has frustrated those who talk down China’s economy, according to Tom Orlik, chief economist for Bloomberg Economics. Such a view reflects the international optimism about China’s economy.
The COVID-19 crisis is not only a test of the performance, ability and level of China’s development, but also reveals the stable momentum and deep-seated advantages of China’s economy.
The stable growth of China’s economy and the sound development in the long term remain unchanged, and so do the country’s huge potential, strong resilience, ample room for maneuver and a host of policy tools. China’s strong confidence and strength to maintain economic growth shine through the twists and turns.
The confidence and strength come from stable economic fundamentals. As the world’s second largest economy, China’s economy is not only large in size, but also “immune” to the impact of the COVID-19 pandemic.
The advantages of such a huge economy lie in China’s huge number of population, the vast territory, the colossal size of the economy, an independent and complete industrial system and national economic system, as well as graded regional economic development.
Domestic demand has become the main driving force for China’s economy. In May, the consumption of daily necessities continued to grow and the consumption of upgrading products remained active. Steady progress has been made in creating a new development pattern where domestic and foreign markets boost each other with domestic market as the mainstay, thus making the fundamentals of China’s economy stable enough to withstand impacts.
The confidence and strength come from the burgeoning new growth drivers. China has embarked on a journey of high-quality economic development in recent years. The added value of high-tech manufacturing grew 8.9 percent year on year in May, 4.5 percentages higher than that of enterprises above the designated size.
Digital economy keeps progressing, as the online sales of national entity went up by 11.5 percent in the first five months this year. Live-streaming e-commerce and other new business models are gaining increasing popularity.
New products and new industries grow vigorously with the output of 3D printing equipment, smart watches, integrated circuit wafers, and charging piles in May increasing by more than 70 percent from the same period in 2019.
Despite the short-term fluctuations in economic performance caused by the COVID-19 pandemic, the country remains resolute in applying the new development philosophy, and continues to work for high-quality development.
The drivers for high-quality growth will guarantee more sustainable, effective and better development of China’s economy.
The confidence and strength come from China’s institutional advantages, and the most notable one is the centralized and unified leadership of the Communist Party of China (CPC) over economic work. Thanks to the strong leadership of the CPC, the country pursues the long-term and fundamental interests of economic development and maintains strategic resolve in the face of the epidemic. Besides, the country takes targeted measures, instead of a deluge of strong stimulus policies, and has realized transformation and upgrading while achieving steady economic growth.
It is expected that this year will see additional tax cutting of more than 2.5 trillion yuan ($356.5 billion) for enterprises throughout the year, and see financial sector make interest concessions of 1.5 trillion yuan to all kinds of enterprises. This all comes down to the huge capacity of macro-control.
More importantly, China is one of the few major economies in the world to “normalize” monetary policy and is equipped with a package of policy instruments, which gives the country abundant policy space if a crisis arises again.
The approach of strengthening countercyclical macro policy regulation while leaving some leeway could help ensure the stable development of China’s economy.
China’s economy develops through a testing time and thrives amid challenges. At present, the country must analyze the current situation from a comprehensive, dialectical and long-term perspective, strive to find new opportunities in the crisis, create new prospects in a changing world, and fully unlock the huge potential and the strong development momentum. In this way, the country will be sure to achieve the economic and social development goals for the year, and enable China’s economy to forge ahead steadily.