China’s growth in Q2 less than expected, but future still looks bright
Published: Jul 17, 2023 06:09 PM
Graphic: GT

Graphic: GT

China's economy grew at a rate of 5.5 percent in the first half of the year, and the full-year target of around 5 percent has been fixated. However, the second quarter saw a year-on-year growth of 6.3 percent, well below what was expected. Due to the severe impact of the COVID-19 pandemic, growth rate in the second quarter of last year was only 0.4 percent, creating a very low base for comparison. Earlier, two foreign media outlets and China Business Network had forecasted growth rates of 7.1 percent, 7.3 percent, and 7.6 percent for the second quarter of this year, but the actual growth was just 6.3 percent, much weaker than anticipated. 

The slowdown in growth in the second quarter has been  widely noted by the public. In June, exports slumped significantly, and domestic demand was weak. The unemployment rate for the 16-24 age group reached a new high of 21.3 percent, according to surveys. The National Bureau of Statistics of China has issued reports on these situations.

Our economy has not achieved the strong rebound that people expected after the end of the pandemic. This implies the trauma caused by the pandemic on the economy has not entirely recovered, investor confidence, especially among private investors, has not truly recovered, and consumer confidence has not increased sufficiently. These issues, combined with global economic weakness, have led to the current situation.

Undoubtedly, China is on the path to recovery. The strict COVID measures have only been lifted for half a year. People are full of expectations for the future. And the various rhythms of society are being readjusted, but it is inevitable that there will be some caution, which is also normal. Although any short-term challenges or setbacks may occur, the potential for economic progress in China still exists. The mechanisms to unlock and mobilize this potential are constantly being adjusted and strengthened. People have high aspirations for a better life and are prepared to make a variety of sacrifices in order to make money. It is highly unlikely that the Chinese economy will lose pace over the long run under these circumstances.

There is currently a sense of pessimism, with some believing that the prosperity that was enjoyed before 2019 will "never happen again." Even the possibility of India overtaking China in a few years has been discussed. We're too fragile if we have so much pessimism simply because the economy fell a little more below expectations in one quarter.
 Perhaps because China's economy has generally been smooth sailing in the decades before the pandemic, public opinion is not resilient enough to withstand storms. Yet the winds are destined to rise up ahead, and we must be strong.

First, the government must be powerful, confident, and a role model for the entire populace. The most important manifestation is to always adhere to the principle of seeking truth from facts and to bravely face all kinds of problems we encounter. Officials do not need to report more good news and less bad news to the public or pamper public sentiment, as this will only be counterproductive. The Chinese people have great faith in the government's ability to effectively address problems if they see the government exhibit the determination to lead the people in finding solutions to problems. As long as we see genuine adjustments being made and the government is truly determined to overcome the obstacles hindering economic recovery, confidence will quickly return. However, if government departments equivocate and only say positive things, the public will feel that the government is not serious about solving the problems, which will in turn cripple their confidence in the government.

The National Bureau of Statistics has presented all the data truthfully, providing a fundamental basis for seeking truth from facts and representing the attitude of the central government. People hoped that officials and analysts would face up to the weaknesses demonstrated by these data, tell more truths, and make more practical moves to solve problems. There are still many prepared tools in China's economic toolbox that should be promptly utilized to promote the accelerated operation of the whole society, increase the output of goods and consumption, and generate more confidence.

Finally, as long as China addresses the issues that need to be resolved and makes the necessary efforts, we will not only be able to meet the targets set for the entire year but also continue to outperform the world's major economies. Despite facing urgency and encountering challenges every year, our growth has brought us this far. It is through this constant sense of urgency that we have become the second-largest economy, leaving the third far behind. In the future, we will continue to progress through ongoing urgency.

The author is a Global Times commentator. opinion@globaltimes.com.cn