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BEIJING. – As the world economy is mired in a confluence of crises from energy shortages to sky-high inflation to recessionary pressure in major economies, global attention is focused on the Chinese economy, the main driving force of global growth, ahead of the upcoming 20th National Congress of the Communist Party of China (CPC) scheduled for mid-October, which is envisaged to illuminate the road ahead for the world’s second-largest economy in the coming years and even decades.
The Chinese economy currently faces multiple downward pressure, including COVID-19 outbreaks and weakening external demand, as evidenced by a significant slowdown in exports in August, which sparked another round of smearing against China’s development prospect from foreign doomsayers.
However, China’s economic fundamentals remain solid, in stark contrast to dire situations in other major economies, and there are sufficient bright spots and policy measures that will ensure stable growth for such a crucial year, economists said.
In the longer term, China will continue to be a main growth driver for the global economy, as the 20th CPC National Congress will inject confidence and lead the nation in embarking on the pursuit of the second centennial goal to build China into a modern socialist power, with all of its institutional advantages that ensured success over the past several decades, economists stressed.
While many foreign media outlets were glad to jump to conclusions in the wake of China’s August trade number announcement, they seemed to have deliberately turned a blind eye to underlying muscles of the trade figures.
The moderation in trade growth could be attributed to reduced orders in line with a broad decline in external economies, Huo Jianguo, vice president of the China Institute for World Trade Organization Studies, said yesterday.
A competitive devaluation in Japan, South Korea, among other countries amid a strong US dollar also put downward pressure on China’s exports, Huo said.
The Chinese yuan has weakened more than 9 percent versus the US dollar so far this year, but it remains much stronger than the Japanese yen and the South Korean won, he continued, adding that sporadic domestic Omicron outbreaks had a certain impact on exports-facilitated logistics capacities.
More noticeably, the country’s brisk exports of new-energy products set it apart from other major economies being crippled by a bruising energy crisis in the wake of the Ukraine tensions.
In a fresh attempt to revitalize the economy, a State Council executive meeting presided over by Premier Li Keqiang on Wednesday pledged to finish the issuance of 500 billion yuan (US$71.92 billion) of special bonds from local governments’ previously unused quotas since 2019 by the end of October, the state broadcaster reported yesterday.
The bond issuance would prioritise the funding of projects being built, according to the report. The Wednesday meeting also urged the stepped-up policy support for employment and entrepreneurship so as to nurture a new growth momentum.
The fresh meeting read-out, in addition to Monday’s announcement of an additional 300 billion yuan in funds through an infrastructure-targeted policy bank financing arrangement, is considered to reassure the markets of the Chinese economy’s capability of sailing through transient challenges.
“We are expecting that the measures taken by China and the Chinese authorities will lead to a revival of growth,” Xinhua said in an article earlier this year, citing World Economic Forum (WEF) President Borge Brende.
Voicing his optimism about China’s medium- and long-term economic development, Brende said that “China’s role in securing global growth has been incredible … What happens in China economically has a huge impact on the rest of the world, and that will continue because it is the second largest economy.”
As all eyes fixate on the upcoming 20th CPC National Congress to be held in mid-October, a monumental gathering that will spearhead the economic and societal trends, the economy is set to get a big boost, thereby anchoring the global economy toward more secured growth, said Cao Heping, an economist at Peking University.
The country had realised the first centennial goal – building a moderately prosperous society in all respects, the Chinese leadership announced on the 100th anniversary of the CPC’s founding on July 1, 2021.
The forthcoming congress must be a significant event to cement belief on the country’s unswerving call for higher-level opening-up and its continued reform efforts in the sphere of business climate, fair competition, among others, Huo stressed, expecting even bolder moves in flexing the country’s institutional strengths to paint China as an indefatigable global growth driver.
Betting on the momentous congress to be a cohesive, enlightening and triumphant gathering, Cao was confident about the tone-setting meeting to instil confidence into the global business community, which hinges growth on a more open and stronger Chinese economy that will continue blazing the trail of globalization regardless of varied uncertainties. – Global Times
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