Underrating China’s resolve to sustain sound growth is way off beam

Much of the so-called China-decline narrative in the West has been based on a misguided belief that China’s response to economic headwinds is inadequate. Those holding this view will find themselves on the wrong side of the story, yet again.

In spite of a more complex global and domestic environment, China is set to wrap up a challenging year with its annual growth target to be fulfilled and even more forceful pro-growth policies in the pipeline.

At a key meeting on Monday, the Political Bureau of the Communist Party of China Central Committee sent a crystal-clear signal on the leadership’s confidence and resolve to maintain a sound economic trajectory that features both reasonable speed and higher quality.

The Chinese economy has staged a solid growth of 4.8 percent year on year during the first three quarters of this year. It is steady on course to meet its annual growth target of around 5 percent as a raft of pragmatic, targeted pro-growth measures since late September effectively lifted market expectations and consumer confidence.

Building on these solid efforts, an array of indicators pointed to improvements in such key sectors as consumption and real estate, supported by massive consumer goods trade-in programs, mortgage rate cuts and relaxed home purchase restrictions.

The upturn is particularly evident in the retail sales of consumer goods, which expanded 4.8 percent year on year in October, quickening from the 3.2 percent increase in September. The country’s property market has also displayed positive changes, with narrowing price declines, stronger sales and improved market sentiment in October.

The scale of policy support is grabbing attention — a debt package will reduce the amount of hidden debts that China’s local governments need to deal with by 2028 by 12 trillion yuan (about 1.7 trillion U.S. dollars). With a size equivalent to about 9.5 percent of China’s 2023 gross domestic product, the package will free up local fiscal resources to boost the economy and raise business confidence.

Benefiting from the effective implementation of these pro-growth measures, China’s economy has stood out globally in the third quarter of this year, outpacing other major economies in terms of growth.

A fact often neglected by many about the world’s second-largest economy is that it remains a developing country. Development still holds the key to solving all the problems it encounters. As China pushes ahead with its modernization drive, it’s crucial to keep its economic growth at a reasonable rate.

And make no mistake, China’s comprehensive policy mix is not just about the mere speed of growth, but commitment to addressing both cyclical and structural challenges.

Much of the government’s increased fiscal input is going to infrastructure and public services, which are important to unlocking China’s long-term growth potential. Monetary support is tilted toward innovative technologies and consumption. Monday’s meeting highlighted boosting sci-tech innovation and developing new quality productive forces. Eventually, what authorities envision is more sustainable development that is innovative, coordinated, green, open and shared.

With all these in mind, there are compelling reasons to be optimistic about and confident in China’s economy: its strong resilience, great potential and sufficient vitality; and the country’s ultra-large market and huge market demand, among others.

The growing optimism is evident globally, with international institutions betting on China’s economic outlook. Bloomberg, based on the latest International Monetary Fund forecast, has concluded that China will be the top contributor to global growth over the next five years.

Reference Link:- https://english.news.cn/20241211/5da021497e5b48dc8224d3167deb8ede/c.html

Prof. Engr. Zamir Ahmed Awan Founder & Chair, Global Silk Route Research Alliance

Zamir Ahmed Awan is the founder and Chair of the Global Silk Route Research Alliance, a think tank in Islamabad. He studied engineering at Shanghai University in the 1980s, and years later he went back to China as Pakistan's science counsellor in Beijing, from 2010 until 2016, working on science and higher education cooperation between the two countries.…

All articles by this author