In the face of more complicated domestic and international economic situations, the Central Committee of the CPC led by Xi Jinping grasps the overall situation with scientific decision-making, leading China's economy to meet challenges and tackle difficulties. In 2016, China's economy operated within a reasonable range, with a development trend of stable performance on the whole while securing progress for the better, showing the world the Chinese government's wisdom to stabilize the economy and its confidence in seeking sustainable development.
According to the data published by the National Bureau of Statistics and the recent economic situation, China's major economic goals for 2016 can be achieved, marking a good start for the "13th Five-Year Plan". China's economic growth rate is expected to be 6.7% in 2016, falling within the expected target range. Stable employment is a major highlight of the economic operation in 2016. From January to November, the number of people who were newly employed in cities and towns reached 12.49 million, completing 124.9% of the annual target, and the unemployment rate in big cities and towns remained at a low level, indicating that the commitment made by Premier Li Keqiang in this year's "Two Sessions" was fulfilled. In terms of prices, from the perspective of the CPI trend, the monthly CPI rose by about 2% on a year-on-year basis this year and remained a trend of modest rise, representing good realization of the target of price stability (the CPI will rise by no more than 3%). In 2016, China's per capita disposable income of urban and rural residents continued to grow, and China was one of the world's countries with the fastest growth of resident income. It is expected that the number of impoverished people will be reduced by more than 10 million in 2016, which is equivalent to one fifth of the world's annual poverty reduction target of 50 million poor people. The gap between the basic public service level of poverty-stricken areas and the national average tends to shrink. According to the current estimates, China's economic aggregate in 2016 has quadrupled over 2000, realizing the quadruple tasks proposed at the 16th National Congress of the CPC four years ahead of schedule, and laying a good foundation for achieving the goal that GDP and per capita income of urban and rural residents will double over 2010 by 2020.
Overall, 2016 saw more positive changes in China's economy and most of the economic indicators have improved. China's market demand has rebounded. According to the situation of the "three drivers" (investment, consumption and export), from January to November, fixed asset investment grew by 8.3%, showing a stable trend despite that the increase in investment was not high; total retail sales of social consumer goods increased stably by more than 10% year on year, and consumption played a stronger role in driving growth; Although export has been declining in the first 10 months (except March), net export has been positive, and export started to rise in November. It can be seen that drivers of economic growth are getting stable and picking up.
The results of the supply-side structural reform began to reveal: stocks kept declining, continuing the downward trend since the beginning of the year; the leverage rate continued to decline, and the asset-liability ratio of industrial enterprises declined year on year and month on month; unit production costs of enterprises continued to decrease. The trend of growth in profits of industrial enterprises emerged and the cumulative growth of total profits increased to 8.6%. The target set at the beginning of the year that energy consumption per unit GDP will fall by more than 3.4% can be overfulfilled. The supply and demand relationship improved, leading to a certain increase in prices of industrial products, especially a high increase in steel, coal, nonferrous metals and building materials. Since March 2012, PPI declined for 54 months in a row, but it began to rise in September this year, reversing the long-term downward trend. The service industry continued to maintain a rapid development trend. From the perspective of industries, high-tech industries representing the direction of transformation and upgrading grew faster than general industries. The economic structure was optimized continuously and the transformation from old growth drivers to new ones was accelerated, marking a distinctive action as part of the supply-side structural reform.
From the perspective of horizontal comparison, China's economic growth in 2016 still topped major countries, surpassing the United States, Japan and euro region countries, and contributed nearly 1/3 to the world's economic growth, thus China continued to be the largest engine fueling the world's economic growth. China actively participated in global economic governance and promoted the construction of the "Belt and Road", sharing development opportunities with countries and regions along the "Belt and Road." The RMB was included in the SDR basket, enhancing the international status of the RMB. In the context of the tide of deglobalization in Europe and the United States, China has vigorously promoted global trade liberalization, investment liberalization and service facilitation, pointing out the correct direction for the world's economic development.
2017 is expected to see more favorable factors for China's economic growth as a result of the current economic rebound. Next year's economic growth will remain stable, CPI increase will continue the moderate rising trend, and the pressure on inflation will not rise significantly. However, because of the U.S. presidential transition and the instable economic growth of the euro zone, international economic uncertainties may intensify; coupled with the long-term accumulation of some prominent structural contradictions, the momentum of demand expansion is still insufficient; thus, China's economy may face more development problems and difficulties in 2017. To cope with the difficulties and problems of economic development, we, when planning next year's economic work, should follow the general principle of making progress while working to keep performance stable, adhere to the supply-side structural reform as the core, expand the aggregate demand moderately, and guide good development prospects, so as to boost the steady and healthy development of the national economy. On the premise of stable employment, we do not need to pay too much attention to whether the economic growth is up 0.1% or down 0.2%. The supply-side structural reform is centered on human development, and the economic growth is for the well-being of the people. Therefore, governments at all levels should pay more attention to the supply of social welfare, reduce poverty and income inequality, put the economic development quality and ecological and environmental benefits in the first place, and take firm confidence in implementing the new development ideas of the Central Committee of the CPC.
According to China's lunar calendar, 2017 has double springs in the beginning and the end of the year. Since the decline in growth in 2012, China's economy has also experienced several twists and turns. However, as an ancient poem says, A thousand sails skim past the shipwreck; a forest thrives beside the withered tree. As the 19th National Congress of the CPC is to be held next year, we hope that under the wise leadership of the Chinese government, China's economy will bring more "spring" news to the Chinese people and even those in the world with the help of the thriving supply-side structural reform.
(Author: Zhang Xingwu, School of Economics Minzu University of China)