China’s economy expected to receive major boost from 20th Party Congress, to anchor global economy for long term
Lujiazui, a financial area of Shanghai Photo: VCG
As the global economy is mired in a confluence of crises ranging from energy shortages to skyrocketing inflation to recessionary pressure in major economies, global attention is focused on the Chinese economy, the main engine of global growth, ahead of the upcoming 20th National Congress of the Communist Party of China (CPC) scheduled for mid-October, which is expected to light the way to the world’s second-largest economy in the years, if not decades, to come.
China’s economy is currently facing multiple downward pressures, including COVID-19 outbreaks and weakening external demand, as evidenced by a significant slowdown in exports in August, which sparked a fresh round of slander. against China’s development prospects from foreign pessimists. However, China’s economic fundamentals remain strong, in stark contrast to dire situations in other major economies, and there are enough bright spots and policy measures that will ensure steady growth in such a crucial year, economists said. .
In the longer term, China will continue to be the main growth engine of the world economy, as the 20th CPC National Congress will instill confidence and lead the nation to embark on the pursuit of the second centenary goal. to make China a modern socialist power. , with all its institutional advantages that have ensured its success over the past decades, the economists pointed out.
Aerial photo taken on July 29, 2022 shows container ships at the Qianwan Container Terminal in Qingdao Port, east China’s Shandong Province. Photo: Xinhua
Resilience in the face of pressure
While many foreign media outlets were happy to draw conclusions following the announcement of China’s trade figures in August, they appeared to have deliberately turned a blind eye to the muscles underlying the trade numbers.
The moderation in trade growth could be attributed to the reduction in online ordering with a broad decline in external economies, said Huo Jianguo, vice president of the China Institute for World Trade Organization Studies, on Thursday. at the Global Times.
Competitive devaluation in Japan, South Korea, among other countries amid a strong U.S. dollar, also put downward pressure on Chinese exports, Huo said.
The Chinese yuan has weakened more than 9% against the US dollar so far this year, but it remains much stronger than the Japanese yen and South Korean won, he said, adding that sporadic domestic outbreaks of Omicron had some impact on exports. logistical capabilities.
The country’s dollar exports rose 7.1% in August from a year earlier, while its exports edged up 0.3% in August year-on-year, according to customs data released on Wednesday. That compares with an 18.0% gain in export growth and a 2.3% rise in imports in July.
A loss of confidence in the country’s export prowess should by no means be justified, Huo said, citing trade readings that point to the sustained competitive advantages of notably private companies, the mainstay of China’s export juggernaut.
China’s dollar-denominated mobile phone exports rose 3.9 percent in the first eight months, following a 2.1 percent increase in the first seven months, according to customs statistics.
The rebound resisted a general slowdown in the country’s exports of mechanical and electrical products from July to August, which accounted for more than half of total exports.
In particular, the country’s vigorous exports of new energy products set it apart from other major economies crippled by a deadly energy crisis in the wake of tensions in Ukraine.
In a new sign, Tesla’s Gigafactory Shanghai delivered 399,939 vehicles in the first eight months, just some 80,000 vehicles less than its full-year 2021 delivery, the US electric carmaker said in a statement. sent to the Global Times on Thursday.
In the first half of the year, China’s new energy vehicle exports jumped 1.3 times to 202,000 units, accounting for 16.6 percent of total vehicle exports, according to figures from the China Association of Automobile Manufacturers.
As the Russian-Ukrainian conflict intensifies Europe’s energy crisis, Germany plans to reduce its natural gas consumption by more than 25%, especially in energy-intensive industries. This suggests that Europe’s chemical production could be partially crippled, eroding the continent’s exports of mechanical manufacturing, chemical production, transportation equipment, among other sectors, according to Chang Ran, a senior researcher at the Zhixin Investment Research Institute.
Given China’s technological and manufacturing strengths in new energy industrial chains and the push from the EU for its new energy policy framework known as REPowerEU, which aims to make the energy supply of Safer EU energy product exports will likely be a bright spot in the export landscape, Chang said in a research report sent to the Global Times.
The structural strength of the trade pillar which reflects the rebalancing of the economy as a whole puts the economy in a de facto advantageous position amid growing worries about global growth, experts pointed out, expecting the economy maintains power in the coming months.
With the export juggernaut still in work mode, albeit possible at a slower pace in the face of the overall global gloom, and still strong infrastructure project commitments, the Chinese economy as a whole should fare better. out than other major economies, although a full rebound in the country’s consumer market will still take time, Huo said.
Workers transport materials in an assembly workshop of CRRC Zhuzhou Locomotive Co., Ltd. in Zhuzhou, central China’s Hunan Province, July 5, 2022. Photo: Xinhua
source of optimism
In another attempt to revitalize the economy, a State Council executive meeting chaired by Premier Li Keqiang pledged on Wednesday to complete the issuance of 500 billion yuan ($71.92 billion) of special bonds from unused local government quotas since 2019 by the end. of October, the state broadcaster reported Thursday.
Issuing bonds would prioritize funding for projects under construction, according to the report. Wednesday’s meeting also called for stronger policy support for jobs and entrepreneurship to nurture new momentum for growth.
The new reading from the meeting, in addition to Monday’s announcement of an additional 300 billion yuan in financing through an infrastructure-targeted political bank financing agreement, is meant to reassure markets about the ability of the Chinese economy to overcome transitional challenges.
“We expect the measures taken by China and the Chinese authorities to lead to renewed growth,” Xinhua said in an article earlier this year, quoting World Economic Forum (WEF) Chairman Borge Brende. .
Expressing optimism for China’s medium to long-term economic development, Brende said, “China’s role in securing global growth has been incredible… What is happening in China economically has a huge impact on the rest of the world, and it will continue.” because it’s the second largest economy.”
A bright future
With all eyes on the upcoming 20th CPC National Congress to be held in mid-October, a monumental gathering that will spearhead economic and societal trends, the economy is set to get a big boost, thereby anchoring the global economy to more secure growth. , Cao Heping, an economist at Peking University, told the Global Times on Thursday.
The country has achieved the first centenary goal – building a moderately prosperous society in all respects, Chinese leaders announced on the 100th anniversary of the CPC’s founding on July 1, 2021.
The upcoming congress must be an important event to cement confidence in the country’s unwavering call for higher-level openness and its continued reform efforts in the area of business climate, fair competition, among others, stressed Huo, expecting even bolder moves to flex the country’s institutional strengths to portray China as a tireless engine of global growth.
Banking on the fact that the congress will be a cohesive, enlightening and triumphant gathering, Cao was confident that the meeting would set the tone to inspire confidence in the global business community, which depends on the growth of a more open and stronger Chinese economy. which will continue to chart the course of globalization regardless of various uncertainties.