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China’s Economic Development Shall Be Healthier and More Sustainable- The “Chinese economic collapse” theory doesn’t hold up to scrutiny

Submit Time:05-06-2017 | Zoom In | Zoom Out

Author:Zhong Chunping and Liu Cheng | Source:People’s Daily

Abstract:

In recent years, China’s economic development has entered a new normal, with the growth rate transforming from a high-speed to a medium-high-speed model, as well as the changing growth mode and momentum. This is supposed to be a normal phenomenon that is consistent with the laws of economic development and the actual situation of China’s development; however, some Western media and scholars are predicting gratuitously that China’s economy will see “a hard landing”, staging a comeback of the “Chinese economic collapse”, which is mainly characterized by “singing empty about China”. Over the past 20-odd years, the “Chinese economic collapse” theory has hit us in waves upon waves, but nonetheless failing to make any accurate prophecy. Instead of collapsing, China’s economy has created “the China miracle” that has attracted worldwide attention. At present, the fundamentals of China’s economic development and its positive long-term trend remain unchanged, and the future Chinese economy will be even healthier and more sustainable. Therefore, this new wave of the “Chinese economic collapse” theory will again be inescapable from its fate of collapse.  

From the perspective of economic growth, China remains the main contributor of world economic growth. At present, Chinese economic scale has exceeded 11 trillion US dollars, and on such base, with each increase of 1 percentage point in GDP, the increment will exceed 100 billion US dollars; the increments brought about when achieving a medium-high-speed growth rate of around 6.5% would be equivalent to the economic aggregate of a medium- or small-sized developing country. Since the outbreak of the international financial crisis in 2008, the world economic recovery has been weak, most developed and developing countries have been plunged into the predicament of economic downturn. However, China’s economy has maintained a stable and healthy development, acting as a veritable “stabilizer” of the world economy, and becoming the main engine driving world economic growth. Over recent years, the annual average contribution rate of Chinese economic growth to world economic growth has reached more than 30%, and China is the largest contributor to world economic growth. Therefore, it is genuinely too biased for those who predict that China’s economy is about to collapse, only based on the country’s growth rate shifting from a high speed to a medium-high speed. 

In terms of the economic structure, China’s economic quality enjoys continuous improvement, with its structure further optimized. This is mainly manifested in: the industrial structure has been continuously optimized, and in 2015, the added value of the service sector accounted for 50.5% in GDP, and such a proportion up 51.6% in 2016, with the contribution rate to the national economic growth increasing from 54.1% in 2015 to around 59% in 2016. The demand structure has continued to improve, and since 2010, the proportion of final consumer spending to GDP has continued to improve, reaching 52.4% in 2015, and up to around 55% in 2016, with its contribution rate to GDP growth reaching 64.6%. In 2016, the size of Chinese consumer market was ranked second in the world, with the proportion of the final consumption expenditure accounting for more than 8% of the world’s total consumption. The two said aspects indicate that the situation where China’s economic growth is overly dependent upon investment and external demand is changing, with the country’s tertiary industrial structure becoming more reasonable, and the quality and efficiency of development being constantly improved.  

As China’s economy has entered a new normal, the shift of its economic growth rate has been accompanied by structural adjustment and impetus transformation, which shall enable Chinese economic development to be healthier and more sustainable. China’s economic growth rate in 2016 was 6.7%, topping the list of the major economies in the world. Moreover, according to the economic data over recent years, China has stabilized its economic growth on the platform featuring a medium-high growth rate of around 6.5%. And such an economic growth rate is not only conducive to the expansion of employment and the economic restructuring, but also accords with the target requirements of the completion of building a moderately prosperous society in all respects. Therefore, the so-called “Chinese economic collapse” theory does not hold up for scrutiny at all.  

Currently, the world economy is undergoing an in-depth adjustment period, with increased uncertainty. In the face of the erroneous remarks of the international “voices bad mouthing China” coming in and out, we must retain our strategic concentration, put forth efforts to maintain economic growth at a medium-high speed, push ahead the industry towards the medium-high-end level, and provide more China opportunities for world economic development. Firstly, unremittingly deepen our comprehensive reforms, break down the institutional barriers hindering economic development, and especially further promote the supply-side structural reform, and continue to nurture and enhance the new energy for economic development; secondly, persevere in the general work guideline of making progress while maintaining stability, and maintain stable and healthy economic development and social harmony and stability and; thirdly, take an active part in global economic governance, and work with various other countries to create a better future.   

(The author is from the Research Center for the Theoretical System of Socialism with Chinese Characteristics, Chinese Academy of Social Sciences)


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