China to adopt new paradigm for fast economic development
Published: Mar 14, 2022 06:39 PM


China's central authorities are widely expected to adopt a new paradigm for development to realize a planned 5.5 percent economic growth target set for this year - by nurturing new drivers centering on science and technology innovation, while vigorously expanding foreign trade with its neighboring countries. 

The Chinese central government's work report delivered earlier this month to the annual legislature, the National People's Congress (NPC), has set the a three-pronged approach to stabilize the world's second largest economy, namely cultivating high-quality new drivers - such as developing new energy resources and smart electric cars, maintaining the economic fundamentals and providing utmost regulatory certainty.

Facing a volatile global geopolitical situation and worldwide pressure sparked by rising inflation across the globe, a clam approach must be maintained when drawing plans to guide the country's next-step development. Prompt adjustment of China's fiscal and monetary policies is also a necessity. 

Central authorities are also set to press ahead with the 10-year action plan on basic research and will implement a three-year action plan for reforming science and technology management systems meaning that China will assume a bigger role in pursuing breakthroughs in key technologies to better address development bottlenecks.

The previously-set growth blueprint of "dual circulation" in which the domestic and overseas markets reinforce each other, with the former being the mainstay, should to be implemented, as the blueprint has displayed resilience and potential of the massive economy in the face of the mounting difficulties both at home and abroad. 

Last year, China's GDP amounted to 114.37 trillion yuan ($18.05 trillion), accounting for 18 percent of global economic output. Many trade partners now consider China as the ballast of global economic resilience, as the country contributes some 30 percent to the global economic growth. 

In 2002 and beyond, more pro-growth measures, including accelerated fiscal spending and tax holidays for businesses need to be supported by central authorities in Beijing to spur capital investment and public consumption - the two backbones backing up economic growth. 

Unlike other major economies in North America and Europe, China did a good job in reining in domestic price hikes in 2021. In January and February this year, consumer price index, a major gauge of inflation, remained at the low-level of 0.9 percent, compared to 7.9 percent for the US and 5.7 percent for the EU. Lower inflation levels mean China's central bank and the Ministry of Finance could move to ramp up monetary and fiscal stimulus spending to propel growth. 

To maintain the stability of Chinese economy's fundamentals, the central government has decided to issue 3.65 trillion yuan ($579 billion) in special-purpose bonds targeting provincial governments this year, with the central government's transfer payments to localities equaling 9.8 trillion yuan, representing a rise of 18 percent from 2021 levels, which will mainly be spent on infrastructure and improving living standards.  

And a total of 100 billion yuan from the unemployment insurance funds will be used to help enterprises maintain stable payrolls and provide work training, an action plan the central government is taking to directly ease the mounting unemployment pressure at home.

Foreign trade is another strong driver of China's economy. Last year, the country saw imports and exports both register double-digit growth of more than 20 percent, and total foreign trade volume exceeded $6 trillion, meaning China continues to be a major force driving global recovery from the relentless onslaught of the COVID-19 pandemic. 

Some experts claim that some Western government's obsession with economically "decoupling from China" during the past two years have shown to be empty threats. This has been further proved by the fact that despite the tariffs war initiative by the US government three years ago, China's production capabilities continue to be the only source for a reliant and large-scale supply chain for the global economy. 

China has reaffirmed its resolve to continue to open up to friendly economic partners, as the country will continue to seek to reach more high-standard free trade agreements with other governments or multilateral free trade deals like RCEP (Regional Comprehensive Economic Partnership) that compasses 15 Asia-Pacific economies, and accelerate global integration, despite obvious headwinds created by the US. To deflect the US' assault, China will also seek closer economic bonds with all non-US economies. 

Elon Musk, founder of Tesla and the world's richest man, said in December during an interview hosted by the Wall Street Journal that Chinese economy will surpass the US by two to three times. And, his prediction is well founded, considering China's non-stop growth since 1980, the people's entrepreneurship, and the Chinese government's unrivalled competency in navigating the economy in times of difficulty.

The author is an editor with the Global Times.