On 3rd September, Ambassador Xiao Qian published a signed article on The Jakarta Post, introduced the steady growth of Chinese economy, emphasized China is confident in responding to external uncertainties, will open further to the world and deepen the mutually beneficial cooperation with its partners. The full text is as follows:
Chinese Economy Will Keep a Good Momentum of Steady Growth
In recent years, China’s economic trend has drawn much attention from the outside. Now, in face of such new challenges as rising protectionism, how is the performance of the Chinese economy? Can China sustain its steady growth in future? And how will China’s economic ties evolve with the region and beyond? I hope the following statistics and observations will answer the questions.
I. Chinese economy is well poised to keep the momentum of stable growth.
According to the latest statistics from the Chinese National Bureau of Statistics (NBS), China’s GDP expanded 6.8 percent year-on-year in the first half of 2018, and has stabilized at a range of 6.7 to 6.9 percent for 12 consecutive quarters. The nominal growth of average per capita disposable income was 8.7 percent, outpacing the overall economic growth. The national consumer price index registered a moderate rise of 2.0 percent. And the surveyed urban unemployment rate was kept at a relatively low level of around 5%. From January to July, more than 8.8 million new jobs were created in the urban areas, accounting for around 80% of the annual target, which is crucial to a major developing country with more than 1.3 billion people.
The total retail sales of consumer goods expanded 11.3 percent year on year. The total value of import and export grew by 8.6 percent, with export up by 5.0% and import by 12.9%. Moreover, the growth rate of electricity consumption, freight volume and other output parameters have outpaced the overall economy. Corporate profits and tax revenues registered double-digit growth. The manufacturing purchasing managers’ index (PMI) came above the boom-bust line of 50. All indicate a robust growth in the business sector and the fundamentals of the Chinese economy have maintained a healthy trend toward stable growth.
II. China’s economic growth enjoys notably improved stability and sustainability.
The sound momentum of China’s economic growth is the result of China’s commitment to reform and innovation in recent years as well as its unrelenting efforts to upgrade the economic structure and foster stronger internal growth drivers. Hence, we expect this growth to be solidly-based and sustainable in the long run. After years of efforts, the Chinese economy has undergone major transition, moving away from reliance on investment and export to being fueled mainly by consumption, the services sector and domestic demand.
Today, new market entities are thriving in China, with an average of 18,000 businesses registered every day this year. Emerging strategic industries and high-tech industries are growing at around 10 percent. Traditional industries are being upgraded at a faster pace. Final consumption and services both contribute to about 60 percent of overall growth. New growth drivers account for over one third of economic growth and more than two thirds of urban job creation. The transition toward high-quality development is picking up speed, with notably improved stability and sustainability in growth.
III. China is confident in responding to external uncertainties.
At present, the world economy is going through profound transition and changes while multilateralism and the multilateral trading regime are faced with severe challenges. This will have inevitable impact on the prosperity and development of China and the rest of the world. Meanwhile, we see that the Chinese economy boasts vast potential, strong resilience and bright prospects.
In terms of per capita GDP, China is still below the $10,000-threshold and lags far behind developed countries. Industrialization, IT application and urbanization are in the ascendant, leaving huge space for further development. In addition to economic restructuring, new growth drivers and other favorable factors, the combination of relatively low fiscal deficit ratio and government debt-to-GDP ratio, relatively high capital adequacy ratio of commercial banks, and the paring down of corporate debt have handed us a host of policy tools for macro regulation.
A good example is how China’s central bank recently dealt with Yuan/RMB volatility. The People’s Bank of China reapplied to its model of a “counter-cyclical factor”. The measure effectively stabilized market expectations, thus enabled Yuan/RMB to remain at a reasonable and equilibrium level. As the second largest economy, China is confident and capable of responding to various risks and challenges and keeping the sustained and healthy growth of its economy in the long term.
IV. China will open further to the world and deepen the mutually beneficial cooperation with its partners.
This year marks the 40th anniversary of China’s reform and opening-up drive. Over the past four decades, the market-oriented reform and opening-up have profoundly changed China and made a great difference to the world. Pursuing further opening-up is China’s choice based on its own development need, and China will not change course because of external pressure. China will continue to open its door and drive its growth. President Xi Jinping announced a series of new opening-up measures at the Boao Forum for Asia (BFA) Annual Conference 2018 last April, and these new measures are delivering quickly. For instance, encouraged by China’s recent move to lift restrictions on foreign ownership to a large extent in service and manufacturing industries, i.e. financial service, auto industry, the leading U.S. electric vehicle (EV) manufacturer Tesla has signed a deal with its Chinese partner to open an EV factory in Shanghai.
China is now the second largest import market and foreign investor in the world. In the next 15 years, China is expected to import $24 trillion in goods and invest $2 trillion overseas. This means great market opportunities for all countries in the world, including Indonesia. Recently, China has taken proactive measures to expand import. For instance, we have drastically lowered the tariff on import parts and consumer goods and decided to import extra 500,000 tons of palm oil from Indonesia. In November this year, China will host the first China International Import Expo in Shanghai. This is an important measure that shows China’s commitment to trade liberalization and further opening up to the world. The Expo will build new platforms for businesses to enter the Chinese market. Up to now, more than 130 countries and regions and over 2800 companies have confirmed their participation. More than 150,000 purchasing agents are expected to attend the Expo. Friends from the business community of Indonesia and beyond are welcome to join us in Shanghai and enjoy this great opportunity.
China will continue to promote the Belt and Road Initiative with the principle of achieving shared growth through discussion and collaboration and further synergize our development strategy with other countries, thus open up new prospects for all countries to further their social and economic development and deliver the 2030 Agenda for Sustainable Development. China will also work with Indonesia and other ASEAN countries to push for the early conclusion of the RCEP negotiation in an effort to promote regional economic integration, and trade and investment liberalization and facilitation, so as to benefit people of regional countries and beyond.