China’s Economic Blueprint Fuels Confidence

Moody’s recent move to change its outlook for China’s sovereign debt to negative from stable has disappointed insiders. But it doesn’t hold much water.

The Chinese economy has registered a continuous and steady recovery against the sluggish global economic recovery, with its gross domestic product up 5.2 percent year on year in the first three quarters of 2023.

China’s just-concluded annual tone-setting Central Economic Work Conference from December 11 to 12 sent an even clearer message in response to the unwarranted concerns about China’s growth prospects and fiscal sustainability, signaling what could be a strong tilt towards economic growth in 2024.

To continue boosting high-quality development, the meeting urged efforts to construct a modern industrial system with scientific and technological innovation. China’s strength in sci-tech innovation has taken a major leap forward in recent years. According to the 2022 Global Innovation Index released by the World Intellectual Property Organization, China has risen to 11th place and remains the only middle-income economy in the top 30. Recently, the Shanghai Municipal People’s Government grabbed the spotlight by issuing a plan, aiming to establish a comprehensive industrial chain which includes the production of rockets, satellites, ground stations and terminals by 2025. Concurrently, China also gets engaged in formulating global rules and standards for core technologies, which is essential for building an open and globally competitive innovation ecosystem.

On expanding domestic demand, the meeting noted the necessity to further promote the development of digital, green and health consumption and foster new growth areas such as the consumption of smart home appliances, entertainment and tourism, sports events and trendy domestic brands.

Consumption is playing an increasingly fundamental role in driving growth in China, with consumer spending contributing 83.2 percent to economic growth in the first three quarters of 2023, as per the data released by China’s National Bureau of Statistics. China’s digital economy reached 50.2 trillion yuan ($7.01 trillion) in 2022, ranking second globally and accounting for 41.5 percent of the country’s GDP, according to a report released by the China Academy of Information and Communications Technology.

Chinese e-commerce giant JD for instance has invested more than 100 billion yuan ($13.9 billion) in basic sci-tech R&D since 2017 and is committed to enhancing the resilience and safety of supply chains by leveraging digital technologies. Hence, it is important to utilize platform enterprises in bolstering economic growth given that China boasts the world’s largest online consumer market and the largest scale of digital infrastructure.

China’s reform and opening-up has embarked on an odyssey in the past 45 years. Encouraging foreign investors to come to China at a time when some multinationals and business groups perceive the country has lost some of its shine is a major priority. In the latest attempt to address concerns among foreign investors, Chinese policymakers in the meeting vowed to foster new drivers of foreign trade, consolidate the overall performance of foreign trade and foreign capital, and expand the intermediate goods, service, and digital trade and cross-border e-commerce export.

According to the latest proposed regulation on cross-border data flows, the vast bulk of business and personal activity involving sending Chinese data abroad will no longer go through a security assessment, a move that is set to make it more convenient for multinationals with operations based in China. That exemplifies how we can make “Invest in China” a popular choice.

Anyone who truly understands the overall picture of the Chinese economy, without any ideological bias, would find it hard not to be optimistic about its prospects.

The author is a journalist with China Pictorial.

For any comments, please contact the author at 18810220720@163.com.