Bustling scenes on the Bund area in Shanghai on January 16. Photo: VCG

A recent survey conducted by the Global Times Institute has shown that entrepreneurs' confidence in the world's second-largest economy in 2024 is solid. Many company executives said that against the backdrop of multiple challenges facing the world economy, China's economic development has shown great resilience and potential in the past year, resulting in high confidence in the country's economic development for 2024. 

Most companies operating in China believe that scientific and technological development, consumer demand potential, new energy and other areas are the driving forces of China's economic growth.

The Global Times Institute and General Office of China Chamber of International Commerce jointly conducted a survey and released a report entitled "Survey on corporate development and economic expectations." 478 valid questionnaires from corporate executives were collected, covering 18 major industry categories.

Strong confidence

According to the survey, 79 percent of the surveyed entrepreneurs said they are very confident or confident in China's economic development in 2024, higher than confidence in Asian economy and confidence in global economy ranked the third. Meanwhile, 80 percent of respondents said they are very confident or relatively confident in China's future economic governance. 

Some 42 percent of the entrepreneurs believe the Chinese economy will have more opportunities than challenges in 2024. Companies expect abundant opportunities in sectors such as artificial intelligence/big data, new energy vehicle, digital economy/e-commerce, bio-pharmaceutical, semiconductor and new materials.

Among all respondents, 32 percent of 211 managers from foreign-invested companies and joint ventures said they had plans to expand their investment or business in China in 2024.

Confidence of foreign enterprises operating in China is also shown by another survey released by the China Council for the Promotion of International Trade (CCPIT) on Tuesday. Nearly 70 percent of foreign enterprises surveyed in the fourth quarter of 2023 are positive about China's market performance over the next five years, up 1.8 percentage points compared with the previous quarter.

More than 90 percent of the foreign companies surveyed expect the profit margin of their investment in China to stay at the same level or increase in the next five years, up about 5.8 percentage points from the third quarter in 2023. Companies that intend to increase investment in China rose about 4.5 percentage points from the previous quarter, read the CCPIT survey.

Amid a lively and vibrant atmosphere filled with red colors, residents shop for Chinese New Year goods in a shopping mall in Beijing's Fengtai district, before the arrival of the Spring Festival, which falls on February 10 this year. Photo: Li Hao/GT

Analysts also expressed confidence in China's economic development, saying there are many new driving forces despite multiple global challenges. The Chinese economy is making steady progress and will continue to provide strong impetus for the world economy. China has established sound and solid fundamentals after decades of development, which has enabled its economy to handle ups and downs.

China's economy may return to an upward cycle in the second half of 2024 and further recover, Yao Yang, economist and Boya chair professor at Peking University, told the Global Times on Tuesday.

"In the next 5 to 10 years, there is still huge potential for China's economic growth. It is not difficult to maintain GDP growth between 5 percent and 5.5 percent, as there is no problem with the fundamentals of the Chinese economy," said Yao.

China's economy is expected to run smoothly in 2024, with annual GDP growth of about 5.3 percent expected, the Center for Forecasting Science (CEFS) of the Chinese Academy of Sciences said in a report on January 9.

Challenges and risks

However, China also faces challenges - domestic and also on a global scale, as shown in the Global Times survey, echoed by analysts.

Challenges include the changes in the real estate market, insufficient market demand, trade restrictions from other countries, financial risk prevention and control, technological "decoupling" and blockade, geopolitical risk and disruption, and lack of confidence in corporate investment.

It is worth noting that 47 percent of the respondents believe trade protectionism in the US is likely to increase in 2024.

Among the major constraints facing the global economy in 2024, about one-third of respondents pointed to the continued slowdown in global economic growth, followed by geopolitical/regional conflicts, with 31 percent mentioning it.

Meanwhile, about one fourth of the respondents think the instability of the international trade system and the supply chain/industrial chain, the politicization of economic and trade cooperation, the global spread of trade protectionism, and the impact of the US financial regulation/monetary policy will be the major challenges in 2024.

"It is expected that in 2024, the economies of most European and American countries will still be in contraction, and the overall demand will be relatively poor. So China's exports still face a big challenge," said Yao.

Tourists visit the Harbin Ice and Snow World. Photo: VCG

New driving forces

But Yao noted that China has been rapidly adjusting to the changes, with exports to developing countries or Belt and Road Initiative (BRI) partner countries accounting for an increasing proportion of total exports.

According to statistics from the General Administration of Customs, China's trade with countries participating in the BRI climbed 2.8 percent year-on-year to 19.47 trillion yuan ($2.7 trillion) in 2023, accounting for 46.6 percent of China's total foreign trade, an increase of 1.2 percentage points from 2022. 

Imports and exports with Latin America reached 3.44 trillion yuan, up 6.8 percent year-on-year while that with Africa reached 1.98 trillion yuan, up 7.1 percent.

Despite a foreseeable weak global demand that may affect exports, analysts pointed out that there are many new driving forces for China's economy in 2024, with expanding domestic demand remaining a focus.

China's economy is shifting from being investment-driven to consumption-driven, Hu Qimu, deputy secretary-general of the digital-real economies integration Forum 50, told the Global Times on Tuesday. 

"The structural upgrading of consumption will promote the transformation and upgrading of the industrial sector," said Hu.

Shenzhen Qianhai Comprehensive Bonded Zone in South China's Guangdong Province on December 15, 2023 Photo: Chen Tao/GT

Final consumption expenditure contributed 82.5 percent to the country's economic growth in 2023, having played a vital role in bolstering economic development. Retail sales set a new record of 47.15 trillion yuan in 2023, up 7.2 percent year-on-year, according to the National Bureau of Statistics on January 17.

The Central Economic Work Conference said China should foster and expand new types of consumption. How? First of all, it is necessary to stabilize and expand traditional consumption, Zhang Xiaoqiang, Executive Vice Chairman of China Center for International Economic Exchanges, told the Global Times.

For example, as China enters the aging population society, it is necessary to vigorously develop the silver economy and housekeeping services, said Zhang.

Zhang also cited Harbin's tourism revenue of 6 billion yuan during the 3-day New Year's Day holidays, which shows huge consumption potential.

"Automobile consumption is also an important growth pole," said Zhang, stressing that China must at the same time emphasize self-improvement and self-reliance on a high level of science and technology, and do a good job in tackling key core technologies.

The Global Times survey showed that 60 percent of entrepreneurs think that China's technology level and independent research and development ability in 2023 improved, amid tightened US restrictions on the export of chips and other high-tech products to China.