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Ten Highlights in the Economic Development of China in 2016

Submit Time:08-02-2017 | Zoom In | Zoom Out

Author:Hu Angang | Source:People’s Daily

Abstract:

In 2016, the world economy recovery was still slow and unbalanced, the international trade and investment were sluggish, with insufficient impetus for growth; as affected by the rising trade protectionism, intensifying reverse globalization of economy and the political and economic difficulties in the Eurozone, the global productivity reduced and innovation was hindered, and the world economy was still in the “low growth trap”. In the big background of stagnant world economy, the Chinese economy, on the contrary, showed a unique good situation. The year of 2016 is the first year for China to complete the building of moderately prosperous society in all aspects, and to solve crucial problems in promoting structural reform on the supply side. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping as the core, we actively adapted to and lead the new normal of economic development, adhered to comprehensively deepening the reform and innovation-driven development, and speeded up the change of economic development pattern and economic restructuring, the economic operation was maintained in a rational level, a good start was realized for the 13th Five-Year Plan period, and the economic development showed many highlights.  

1     Highlight of economic growth: realizing the target of redoubling the GDP ahead of schedule 

In 2016, the economic operation was steady in China, and it is expected that the GDP grow by about 6.7% in the whole year, meeting the expected goal set at the year beginning. This rate is in line with the basic features of changed rate, optimizing structure and transfer of motive force under the new normal of economic development, has laid a solid foundation for China to march from the upper mid-level income phase to the high income phase, and provided a good macroscopic economic environment and conditions for improving the quality of economic growth, promoting the optimization of economic structure and promoting energy conservation and emission reduction. Internationally, China is still one of the countries with the highest economic growth rate in the world. The economic growth rate of about 6.7% is much higher than that of the United States at about 1.5%, that of Japan at about 0.6%, and that of the Euro zone at about 1.5%. It should be noted that, the economic aggregate of China has already exceeded 10 trillion USD, so the GDP growth of 1 percentage point on this base is over 100 billion US dollars, equivalent the economic growth of 1.8 percentage points in 2010. In other words, the GDP increment realized by the current growth rate of 6.5% is equal to that realized by a growth rate of over 10% in 2010. From this perspective, we must say that China made a brilliant highlight in economic growth in the depressed world economy in 2016.  

It is worth pointing out that the GDP of China in 2016 is about 4.22 times that of year 2000, realizing 4 years ahead of time the goal of redoubling the GDP of 2000 by 2020 set at the 16th National Congress of the CPC. This is the biggest highlight in the economic development of China this year. It is expected that the per capita GDP of China in 2017 will also be about 4 times that of 2000, realizing 3 years ahead of time the goal of redoubling the per capita GDP of 2000 by 2020 set at the 17th National Congress of the CPC. This has laid a good foundation for the goal of doubling the GDP and per capita income of urban and rural residents in 2020 from those in 2010 as set at the 18th National Congress of the CPC, equivalent to double assurance for finishing building a moderately prosperous society in all aspects.  

2     Highligh of structural upgrading: transition to the post-industrialization era 

In 2016, the economic structure of China was further optimized, as an apparent light spot. In the 12th Five-Year Plan period, the service industry of China achieved substantial growth, and in 2015, the added value of service industry accounted for 50.5% of the GDP, exceeding 50% the first time. In the first 3 quarters of 2016, this proportion rose to 52.8%, and its contribution rate to economic growth also increased from 54.1% in 2015 to 58.5%, the highest contribution rate of service industry to economic growth since the founding of New China. The Chinese economy is experiencing a major transit from the era dominated by industry to one dominated by service industry, or the post-industrialization era. China will have a high quality, diversified and refined living-oriented service industry, and a finance intensive, knowledge intensive, science and technology intensive and human capital intensive production-oriented service industry, which is one of the important structural features for becoming a fairly developed economy. In the meantime, the industrial structure of China is also continually optimized and upgraded, and the growth rate of high-tech industries and equipment manufacturing industry is obviously higher than that of general industry. In the first three quarters of 2016, the contribution rate of added value of high-tech manufacturing industry to the industrial growth reached over 20%. The added value, export volume and export added value of the high-tech industries of China have all exceeded that of the United States, ranking at the first place in the world, indicating that China is rapidly growing towards the first largest country of high-tech manufacturing. The highlight of structural upgrading in 2016 is the major result obtained in the steadfast progress of supply-side structural reform, indicating the accelerated change of new and old growth kinetic energy.  

3     Highlight of consumption: the scale of domestic market ranked at the second place in the world 

Consumption has become the biggest impetus in the economic growth in China. The proportion of the final consumption expenditure of China in GDP has kept on rising since 2010, reaching 52.4% in 2015. In the first three quarters of 2016, the proportion of the final consumption expenditure in GDP was further increased to about 55%, and its contribution to the GDP growth rose rapidly from 66.4% in 2015 to 71%. In 2016, the scale of consumer goods market of China ranked the second in the world, and the proportion of the final consumption expenditure in world total consumption exceeded 8%, significantly narrowing the gap between China and the United States. The growth rate on domestic consuming market ranks the top in the world. In the first three quarters of 2016, the gross social retail sales saw a nominal growth of 10.4% on a year-on-year basis, and the actual growth was 9.8% after accounting for price factor, 3 percentage points more above the economic growth rate. We can say that consumption has become the “ballast” in the Chinese economy, producing a more significant effect in driving up economic growth, and it also indicated that economic growth is playing a much bigger role in improving people's livelihood and welfare. The economic growth pattern of China has shifted from mainly investment-driven to mainly consumption-driven.  

4     Highlight of new economy: the biggest digital dividend in the world 

The year of 2016 saw rapid development of new economy and new businesses in China. China has become the biggest country of digital users in the world in the numbers of both netizens and mobile phone netizens, and this has created great digital dividend. The first is economic growth dividend. By connecting enterprises, digital economy has substantially increased production efficiency, driven up end consumption and expanded the scopes of trade. In first three quarters of 2016, the online commodity retail sales in China grew by 25.1%, 14.7% percentage points higher than the growth rate of gross social retail sales of consumer goods, greatly boosting the consumption on domestic market. The transaction volume of the whole network reached 180 billion yuan on a single day of November 11th. Consumers in 235 countries and regions in the world shop through the e-commerce platforms of China, and these platforms operate globally, covering the whole world. The second is employment dividend. The digital economy connects the public, and powerfully promotes entrepreneurship and individual operations, creating many jobs. The third is service dividend. By connecting the government, digital economy has realized rapid spread of e-administration, enabling the government to provide public information and public services with better quality, in a more convenient way and at lower cost.  

5     Highlight of innovation: the world biggest country with invention patent awards 

In 2016, China scored substantial results in innovation-driven development. China worked out the National Innovation-driven Development Strategy Outlines, defined the technological development orientation in key areas, implemented the “Internet plus” action plan and national big data strategy, and deployed 15 major national scientific and technological programs and major projects of “scientific and technological innovation 2030”. China built new engines and fostered new economic growth areas by relying on innovation driving, to continually improve the quality and efficiency of economic development and push the industries towards medium and high levels. A batch of innovation results in scientific and technological areas such as supercomputing and quantum communication have reached the world leading level. The new motive force for economic growth has been continually enhanced. The creation of intellectual property rights grew in an explosive pattern. In 2015, the number of applied and awarded invention patents of China leapt to the first place in the world, in the first 7 months of 2016, the number of awarded invention patents in China grew by 49.5%, and it is expected that it exceed 500,000 in the whole year, making China the first country in the world with over 500,000 awarded invention patents in a single year. In the first three quarters of 2016, there were 2.649 million trademark registration applications in the whole country, a growth of 25.2% over the same period of the previous year. By the end of September, every 7.1 market entities possess one valid trademark in China. The explosive growth of intellectual property rights making has provided a powerful support to the innovative development of Chinese economy, which is also giving powerful push to the progress of economic innovation and new scientific and technological revolution in the world.  

6     Highlight in entrepreneurship and employment: the biggest scale of new employment and the largest number of market entities in the world 

In the first three quarters of 2016, China provided new jobs for 10.67 million people in cities and towns, and it is expected that this figure be more than 13 million again in the whole year, exceeding the expected target for new jobs in the whole year, setting a record of providing new jobs for 13 million people under the condition of medium-high economic growth rate. In the end of Q3 of 2016, the registered unemployment rate in cities and towns of China was 4.04%, below the unemployment rate control line of the whole year, and China is one of those with the lowest unemployment rate among the main economies in the world. In comparison, the unemployment rate is about 10% in the Euro zone, and the unemployment rate of young people is as high as 20%.  

The year of 2016 saw prosperous development of popular entrepreneurship in China. Obvious results have been obtained in the reform of commercial system, giving powerful impetus to the active development of market players. At present, China is a country with the largest number of market entities in the world. In the first three quarters of 2016, an average of over 40,000 market entities were registered every day in China, and at present, there are more than 80 million market entities of various types in the whole country. Iconically, the number of people engaged in entrepreneurship in China is more than the total population of Germany, and also exceeds the total number of market entities in the United States, EU and Japan. In the first three quarters of 2016, China had an average of 14,600 new enterprises registered every day. China will become the biggest “kingdom of entrepreneurs” in the world, and they are both market entities and main job creators.  

7     Highlight of increasing income and alleviating poverty: rapid increase of per capita income, and setting a new world record again in poverty shake-off population 

With the steady development of economy, the living standard and quality of the Chinese people have generally improved. In 2016, the per capita disposable income of the urban and rural residents in China kept on increasing, by respectively 5.7% and 6.5% in the first three quarters after adjusting for price, and China is among the countries with the most rapid growth of resident income in the world. The per capita disposable income of rural residents increased at a rate higher than that of the urban residents, the income gap between urban and rural residents has been narrowed continually, and the income difference dropped to about 2.8 times.  

In 2016, China issued the 13th Five-Year Plan Poverty Alleviation Program, and filing was made for all poverty-stricken population of over 50 million. It is expected that the poverty-stricken population reduce by over 10 million in the whole year, equivalent to 1/5 of the poverty alleviation target of reducing the poverty-stricken population by 50 million every year as proposed by the international society. More than that, the gap of the basic public service level in the poverty-stricken areas from the national average level tended to narrow. Especially, new actions of poverty alleviation with tourism was implemented, such as developing rural tourism according to local conditions, energetically developing leisure-making agriculture and actively developing tourism with featured culture, to narrow the gap of people with different income levels and promoted win-win mutual benefit of areas both getting rich first and later.  

8     Highlight of ecology and environmental protection: green development accelerated, and environmental quality improved 

In 2016, China made important progress in energy conservation and emission reduction. In the first year of 13th Five-Year Plan, China made green development as the priority among priorities, endeavored to raise the utilization efficiency of various efficiency, reduce energy consumption and environmental pollution from sources, and strengthen pollution prevention and control. In the first three quarters of 2016, the energy consumption per unit GDP was lowered by 5.2% on a year-on-year basis, and the carbon emission per unit GDP dropped by 6% on a year-on-year basis, both fulfilling the binding indicators of the year ahead of schedule; the emission of main pollutants kept on decreasing, and it is expected that the emission quantity of 4 main pollutants (COD, ammonia nitrogen, sulfur dioxide and oxynitride) would decrease more than that set in the annual binding indicators for the whole year. In 2016, the resources consumption, environmental pollution and ecological cost have all been significantly reduced, and the economic development quality and ecological efficiency increased substantially, setting favorable conditions for realizing the target of generally improving ecological environment in 2020. It should be pointed out that, in the first three quarters of 2016, the raw coal output in China was reduced by 10.5% on a year-on-year basis, and negative growth was realized after the first negative growth of carbon dioxide emission in 2015, making important contribution to the global carbon emission reduction.  

9     Highlight of “going global”: making outbound investment to benefit the world 

The year 2016 saw rapid growth of outbound investment from China. In the first 3 quarters, China absorbed FDI of 95.09 billion US dollars; and made direct outbound investment of 134.22 billion US dollars, a growth of 53.7% on a year-on-year basis, and the development areas have covered 160 countries and regions in the world. The Chinese enterprises made actual transaction volume of 67.44 billion US dollars in overseas merger and acquisition, involving 18 major industrial categories in 67 countries and regions. In overseas project contracting, the amount of newly signed contracts reached 147.8 billion US dollars, in the 61 countries related to the “Belt and Road” construction, the amount of newly signed contracts for overseas project contracting was 74.56 billion US dollars, accounting for 50.4% of the amount of newly signed contracts for overseas project contracting by China in the same period, exceeding expectation in both progress and results. The outbound investment of China has grown rapidly, making China one of the biggest outbound investment countries in the world, creating massive wealth and jobs in relevant countries.  

10   Highlight of global governance: providing the “Chinese solution” for the world economic development 

The year of 2016 marked the full participation of China in global economic governance. China promotes the world development with its own development, but also provides “Chinese solution” for building an innovative, vigorous, linked and inclusive world economy. It is expected that in 2016, the contribution of China to the world economic growth exceed 30%, remaining as the biggest engine and pillar for world economic growth, and providing the main impetus for world economic growth. More importantly, in the background that the world economy was attacked by trade protectionism and reverse globalization surge, China hosted the G20 Hangzhou Summit, put forth many proposals and action plans at a number of international occasions, especially, China promoted the preparation of the G20 Global Trade Growth Strategy and G20  Guiding Principles for Global Investment, to energetically push forward liberalization of global trade, liberalization of investment and convenience of service, pointing the orientation of world economic development and masterminding for the recovery of world economy. China has fully participated in the global economic governance, and the Chinese concepts and Chinese solution put forward have obtained extensive approval and response in the international society. The Chinese solution will push the global economic governance in a more fair and rational direction, to make benefit for the people of all countries in the world.  

 (Author entity: National Research Institute of Tsinghua University) 


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