Thriving Chinese economy attracting global attention

By Hu Angang Source:Global Times Published: 2017/10/24 22:28:39

Illustration: Peter C. Espina/GT

The world is paying more and more attention to China, especially its economy. The IMF has again raised its forecasts for China's economic growth rates this year and next.

Since reform and opening-up began, China has had the world's highest economic growth, with average annual GDP expansion of 9.9 percent between 1978 and 2011. After the 18th National Congress of the Communist Party of China in 2012, China's economic development entered the "new normal" state, shifting from high-speed growth to a slower rate of expansion as it adapted to new opportunities and situations.

In 2011, the Central Economic Work Conference determined that "making progress while keeping performance stable" would be the overall tone for the first time. In 2016, this policy became the methodology for governing the State and dealing with political and economic work.

The overall tone of "making progress while keeping performance stable" is a necessary part of economic development and also an intrinsic manifestation of the cyclical characteristics of China's development. Between 2012 and 2016, the global average annual GDP growth rate fell to 3.3 percent, while China's GDP growth rate remained at 7.2 percent, much higher than the world average and that of lower-middle-income countries in general.

China's economy has become the world's largest growth engine and stabilizer.

The results of "making progress while keeping performance stable" have been remarkable. Over the past five years, China's economic growth has been stable and inflation has remained at the low level of 2.0 percent. Urban registered unemployment has been less than 4.1 percent. The number of new jobs created in urban areas has been more than 13 million annually, accounting for about one-third of the world's new employment. China's labor force participation rate has remained above 56 percent, the highest in the world. It has also been the country with the world's largest and fastest-growing market.

However, that doesn't mean there haven't been any changes. Innovation has become the driver of development and the key to deepening reform. China's patent applications account for nearly half of the world's total.  Over the past five years, China's technological innovation has grown both in terms of flow and inventory.

In addition, the economic structure is clearly becoming optimized. The proportion of tertiary industry added-value accounts for more than half of GDP and employment in this sector represents 43.5 percent of the total. High-technology industries have showed a significant increase in the proportion of total manufacturing activity in China, whose added value exceeds the US to rank first in the world.

The urbanization rate has risen, while the gaps between the per capita disposable incomes and consumption expenditures of urban and rural residents have narrowed. Regional development gaps have contracted persistently, and the per capita disposable income growth rate in the western region of China is significantly higher than in other regions.

The digital economy has sprung up everywhere and the green economy is in the ascendant, while Chinese enterprises have started to step onto the world stage, an important feature of China's new economy. More Chinese companies are appearing on the Fortune Global 500 list, with the number rising from 79 in 2012 to 115 in 2017.

The stability of the world economy needs confidence from China, and the world's economic development needs China's impetus. The nation's stability, growth and prosperity are highly connected to the outlook for the world.

The author is director of the Center for China Studies, Chinese Academy of Sciences and Tsinghua University. bizopinion@globaltimes.com.cn



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