Editorial: Market recovery shows government has economy well in hand

Source:Global Times Published: 2015-7-13 18:57:56

China released its exports and imports data on Monday, which stages a modest recovery in June. Exports rose 2.1 percent, the first positive growth in four months. Imports showed a continuous slide of 6.7 percent, but with a narrowing range. The overall situation is better than expected.

Monday’s stock market remains its rebounding momentum that started from last Thursday. The Shanghai Stock Exchange Composite Index jumped 2.39 percent, and over 1500 stocks reached the daily limit. The stock market also withstood the pressure of 359 stocks resuming trading. After the short-term market crash, the market is gradually gaining confidence with the government rescue measures and the restoration of investors’ enthusiasm. 

For a long time, a negative sentiment toward the Chinese economy has been spreading and came to the climax during the stock market turbulence. The favorable turn since last Thursday led by the government has comforted people, and the positive start on Monday and the export and import data have stabilized investors’ mood. This is the outcome of the country’s long-term development and rapid responses in emergencies.

China’s problems have been exposed one after another, but the country’s strategic initiatives to reform are still functioning. The Chinese economy is going through positive adjustment. The downward economy is partly driven by the enforcement of reforms. Such a slow economic outlook is still much better than any “peaks” generated by the stimulus plans of some economies.

The stock market experienced a freefall a week ago, making a number of people feel a sense of “game over.” Pessimistic predictions appeared, such as there will be a huge stumble in the Chinese foreign exchange market, a striking blow to the country’s real economy, and even the emergence of an overall financial crisis. Yet only a week after the government rolled out a batch of rescue measures to save the market, the situation has completely reversed. Once again, the Chinese government’s capability of adjustment has been strongly proved. Despite the controversies over the methods and the future uncertainties in the market, the government of China is competent enough to get the big picture of the nation’s economy under control.

Looking back on the history, the economic evaluation of the Chinese government and mainstream economic scholars are generally objective and accurate, and the government’s actions have also matched its words. In contrast, people who hold the gloomy view over the Chinese economy have lost their credibility, while their investment strategies turned out to be a failure. The Communist Party of China (CPC) has thus defined the name of “new normal.”

Most of those who believe in the Party and refused to “flee” from the plunging stock market at the beginning of last week have made a packet out of it now, or at least recovered their losses. And those who entered the game last Thursday have also been proved to have made the right decision. 

Therefore, this Monday turned out to be quite upbeat. As a large country, nothing could be guaranteed for sure, and uncertainties will keep flooding in. But China can always make out the best of it. In this regard, China does perform better than other economies under the same conditions, which has been proven time and again. This might be one of our rules to forecast the future development of China.

Posted in: Editorial

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