Thu | Aug 17, 2017

Niu Qingbao | Chinese economy: more hope than difficulties

Published:Tuesday | July 12, 2016 | 7:00 AM

Since China and Jamaica entered into a friendly partnership for common development in 2005, the economic and trade cooperation between our two countries has advanced remarkably. To cash in on opportunities brought by a sound Chinese economy, a correct understanding of the Chinese economy is a prerequisite.

How is the Chinese economy doing? Some people assume it can keep growing double digit like it has been for decades. Some media, however, have been predicting a hard landing for years. None of the above is correct.

On June 27, 2016, Chinese Premier Li Keqiang offered authoritative insights into the state of the Chinese economy when addressing the Summer Davos Forum in Tianjin. Following are the main points he made:

 

CHINESE ECONOMY IS DOING FINE

 

Even though faced with growing downward pressures, the economy grew by 6.7 per cent in the first quarter. Employment is stable. The structure and quality of the economy have improved. Consumption and the service sector have become primary drivers of growth. The rapidly growing new economy has played an increasing role. China has taken measures to streamline administration, delegate power, and promote mass entrepreneurship and innovation.

Now, some 40,000 new market entities are being created every day, including over 13,000 new enterprises, the best in three years. There has been fast development in new technologies, new industries, new forms of business, and new business models. This has provided strong support for growth, jobs, and economic transformation and upgrading.

 

MORE HOPE THAN DIFFICULTIES

 

The fundamentals have remained unchanged. Sufficient policy tools such as macro control, proactive fiscal policy, and prudent monetary policy are available to keep economic performance within a reasonable range, prevent systemic or regional risks, and achieve the pre-set main economic and social development targets.

China is the largest developing country in the world, enjoys huge potentials, strong advantages, broad space, and bright prospects:

- China has a big workforce, 170 million of them with higher education or professional skills. Every year, China graduates over seven million college students and over five million secondary vocational students;

- China is number one in terms of the number of science professionals and number two in R&D input;

- China is the second-biggest economy, the largest manufacturing country, a major trading nation in goods and services, and a major destination and source of foreign investment; and

- China is also a major emerging market, with the biggest growth potential.

 

TRANSFORMATION AND UPGRADING

 

China will focus on development as a top priority and pursue a new development approach. China will carry out reforms, innovation, and opening-up so as to be less reliant on natural resources and more driven by human resources and innovation. The economy will maintain a medium-high growth and move to medium-high development levels.

China will encourage innovation. China will further implement the innovation-driven development strategy, advance mass entrepreneurship and innovation, work for breakthroughs in major and key technologies, and promote the commercialisation of innovation results.

We will continue to promote the "Internet+" strategy and actively apply new information technologies like the Internet of Things, big data, and cloud computing. We will nurture more new industries, new forms of business and new business models, develop the new economy, and cultivate new areas of economic growth.

The Made in China 2025 initiative will make manufacturing more IT-based, smarter, and more competitive. China will actively encourage mass participation in the sharing of the economy to unleash everyone's potential in entrepreneurship and innovation.

China will comprehensively deepen reforms. Reforms remain a strong driving force behind China's development. China will advance structural reforms - supply-side reform in particular - to facilitate restructuring. We will further streamline administration, delegate power, strengthen regulation, and improve services. Undue government powers will be taken away, and market regulation will be strengthened and innovated both during and after the process. An open platform of efficient public services by the government will be set up.

Reforms in fiscal, taxation, finance, investment and other key areas will be carried out in a coordinated way. The government has put in place nation-wide reform to replace business tax with value-added tax to lower the tax level and ease the tax burden for businesses. The government will continue to improve the modern financial regulatory regime, remove obstacles for private businesses and stimulate private investment, and better protect intellectual property rights.

China will remain committed to opening up. China will open wider to the outside world. China's service sector and general manufacturing sector will open even wider. There will be more investment opportunities for foreign businesses and a fairer, more transparent and predictable investment environment will be fostered.

The fundamentals of the Chinese economy determine that there is no basis for persistent depreciation of the RMB. China has the capacity to keep the RMB basically stable at an adaptive and equilibrium level.

Premier Li concluded by saying: "China will work with other countries to seize the opportunities brought by the new round of technological and industrial revolution. Together, we will build new engines of economic growth, promote steady recovery of the world economy through transformation and upgrading, and jointly usher in a better future for the development of mankind."

- Niu Qingbao is the Chinese ambassador to Jamaica.