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The Chinese Economy Overshadows the World

--Fairly high growth rate, adequate new jobs and satisfactorily low prices altogether ensure that China can sustain the 6.5% growth rate this year.

Submit Time:03-11-2017 | Zoom In | Zoom Out

Author:Lu Ya’nan | Source:People’s Daily (October 11, 2017)

Abstract:

“There is no problem for China to beat the government’s target for around 6.5% economic growth rate this year. The Chinese economy continues improving while remaining stable. It is expected to outperform the expectation throughout the entire year,” said Ning Jizhe, Commissioner of the National Bureau of Statistics of China (NBS), at the press conference hosted by the State Council Information Office on October 10, 2017.  

China contributes the most to global economic growth across the world.  

From 2013 to 2016, China’s GDP grew by an annual average of 7.2%, which is higher than the world’s average (2.6%) and the developing economies’ average (4%) over the same period.  

“In the past few years, China developed its economy at an annual average rate of 7.2%, accompanied by a 2% inflation rate and a surveyed unemployment rate of about 5%. The co-existence of fairly high growth rate, adequate new jobs and satisfactorily low prices contributes to a hard-won operational landscape, which allows the Chinese economy to overshadow its peers all over the world,” said Ning.  

China’s overall national strength has grown considerably. In 2016, China’s gross domestic product (GDP) reached 74 trillion yuan, which is 1.32 times that in 2012 if calculated at the then constant prices.  

Its contribution to the global economic growth comfortably maintains the first place. In 2016, China’s GDP accounted for 14.8% of the world’s total, representing an increase of 3.4 percentage points over 2012, and comfortably securing its second position across the globe. From 2013-2016, China kept to contribute around 30% of global economic growth every year averagely, which exceeded the total contribution rate of the United States, Eurozone and Japan combined, and ranked the first place across the world.  

The economic growth is accompanied by an improved economic structure.  

The service sector accounts for nearly half of the national economy. In 2016, the proportion of value added of the tertiary industry in GDP reached 51.6%, up by 6.3 percentage points over 2012. In the first half of 2017, this number jumped to 54.1%.  

Consumption becomes the most important engine of economic growth. In 2013-2016, final consumption made a contribution of 55% to the economic growth, 8.5 percentage points higher than that of capital formation. Domestic demands provide the economic growth with the most-needed support.  

The coordinated development of urban and rural areas takes on a new look. By the end of 2016 in China, the urbanization rate of resident population stood at 57.35%, up by 4.78 percentage points over the end of 2012, and the income gap between urban and rural residents narrowed down by 0.16 time over 2012.  

New development philosophy guides the practice for economic and social development.  

How could China make astonishing accomplishments against an extremely complex environment at home and abroad?  

New development philosophy leads China into the new normal. Take innovation for example. In 2016, the percentage of domestic and foreign patent applications that were handled, and that of patent rights granted, went up by 69.0% and 39.7% over 2012, respectively. The year of 2015 witnessed that the economic value added which features three “new” made up 14.8% of the national GDP.  

“In the past five years, as required by the CPC Central Committee and the State Council, we employed new development philosophy to guide the practice for economic and social development. By doing so, we not only got informed of the features demonstrated by China in the current phase, but also did better in solving various imbalances and problems. As a result, we become strong for now and gains more momentum for sustainable development,” said Ning.  

The supply-side structural reform advances solidly and the transformation and upgrade drive gathers its pace.  

The efforts to cut overcapacity go on as smoothly as expected. From January to July of 2017, the steel industry beat its annual target by completing all scheduled tasks; the coal industry cut the overcapacity of 128 million tons, fulfilling 85% of the annual target.   

At the same time, the drive to reduce inventory produces noted effect. By the end of this August, the area of commodity housing for sale declined by 12% year on year.  

De-leverage advances with firm steps. By the end of this August, the liability-to-asset ratio of industrial enterprises above a certain scale dropped by 0.7 percentage point over the same period of last year.  

The efforts to cut costs start to take effect. From January to August of 2017, the industrial enterprises above a certain scale lowered the cost per 100 yuan of principal business revenue by 0.12 yuan over the same period of last year.  

Inspiring progresses are made in bolstering areas of weakness. From January to August of 2017, the investment in ecological protection and environmental governance, that in public facility management, and that in agriculture rose by 28.2%, 24.3% and 16.1% year on year, respectively.  

The supply-side structural reform in agriculture advances steadily. China generated 616.25 million tons of grains in 2016, took a step further towards the target of 0.6 trillion kilograms for four consecutive years. At the same time, grain production began being concentrated in advantageous areas.  

As Ning noted, “thanks to the practice of focusing on the supply-side structural reform to address overcapacity, reduce inventory, de-leverage, lower costs, and bolster areas of weakness, we have balanced the supply-demand relationship in both some specific industries and even the entire economy as a whole.”  

The Engle’s Coefficient for residents registered at 30.1%, approaching the wealthy level.  

Since the 18th National Congress of the CPC, China has improved people’s livelihood considerably and enabled all Chinese people to benefit from its development.  

People’s wallets are getting fatter. In 2016, the per-capita disposable income nationwide posted at RMB23,821, up by RMB7,311 over 2012, which represented an annual actual growth rate of 7.4%. The income actually rose by 7.3% in the first half of 2017 year on year.  

Consumption is thriving. In 2016, the Engle’s Coefficient for Chinese residents was 30.1%, down 2.9 percentage points over 2012, approaching the range of 20%-30% which indicates a wealth life set by the United Nations.  

The move of targeted poverty alleviation produces marked effects. Based on the rural poverty standard of RMB 2,300 per person a year (as per constant price in 2010), there were 43.35 million rural people living in poverty in 2016, reducing by 55.64 million over 2012.  

A sound social security system comes in place. In 2016, China managed to lower the percentage of individual healthcare expenditures in the total medical bills below 30%, had all its people covered by the basic medical insurance, and basically completed the building of a social security system that cover both urban and rural residents.  

Social undertakings progress across the board. Chinese people receive better education with every passing day. In China, the average education years of the population aged 15 and above grew from 9.05 in 2010 to 9.42 in 2015. Thanks to the continuously improved medical conditions, the average estimated lifespan of Chinese residents increased from 74.83 years in 2010 to 76.34 years in 2015.  


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