Q1 data cause for economic optimism

Source:Global Times Published: 2016-4-16 0:46:01

China's economy grew 6.7 percent in the first quarter this year. Though a new low since 2009, the growth rate beat pessimistic market expectations. Foreign mainstream analysis showed positive reaction to this figure, as the world has seen that China's economic restructure has begun to yield results.

As a result of this restructuring, the tertiary industry and consumption have been increasing steadily. Once other major economic indicators stabilize, China will achieve a real soft landing.

First-quarter figures show that export is picking up, so is power consumption. Profit of industrial enterprises recorded the first increase since last year, while foreign exchange reserves reversed the trend of decline and increased $10 billion in March.

Although it's still too soon to declare a rebound of Chinese economy, the first-quarter data shows that Chinese economy is showing not a free fall but rather a trajectory under control.

Compared with other major economies, China has dealt with challenges brought by the financial crisis in an orderly way and with more fruitful results. China is the only major economy that has undergone substantial reforms. It has been dedicated to reducing industrial overcapacity, destocking and removing leverage. As a result of cultivating consumption and bolstering tertiary industry, burgeoning industries have gained momentum, and people have become more at ease viewing the GDP figures.

China still has a bunch of economic problems, and one can easily find reasons to be pessimistic. However, developing the economy has always been a process of addressing problems, therefore being good or bad is only a relative concept.

Besides the determination and efficiency of reforms, the immense potential of Chinese economy provides enough room for adjustment. Industrialization and urbanization are ongoing in China, and even first-tier cities still have the potential to upgrade consumption. These are the guarantee of economic growth, as there is no proof of disorientation or running out of vitality.

Stabilizing the economic development is key for China, as it's the foundation of legitimacy for all other undertakings in the country. In previous years the high-speed economic growth resulted in a number of problems. To solve or dissolve those problems while maintaining an overall relatively rapid growth is the most significant goal of this round of economic reforms.

In China, whether we admit it or not, economic issues are politics. China is at a critical moment in which all trends and changes are scrutinized by the world. China has done well so far, but the economy of the first quarter is like a poised manner and calm breathing in the middle of a panic attack.

Posted in: Editorial

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