Over the past two years, the Covid-19 pandemic has presented serious challenges to the global economy. The recent omicron variant has added new uncertainty to the long-awaited economic recovery.
China is the world’s second-largest economy and has been contributing around 30% to global growth for years. It is the largest trading partner of more than 50 countries and regions and a major partner of 120 other countries and regions. So, how the Chinese economy is doing has been commented on and debated with wide interest by analysts.
From January to September 2021, China’s GDP grew by 9.8%, averaging 5.2% year-on-year, but the pace slowed to 4.9% in the third quarter. Given the baseline of last year’s four quarters, -6.8%, 3.2%, 4.9%, and 6.5% respectively-, and the cyclical factors of isolated pandemic relapses and some natural disasters in China, the slowdown was not entirely unforeseen.
On the other hand, 10.45 million jobs were created in the same period, meeting 95% of the target for the whole year. The consumer price index (CPI) increased by 0.6%, well below the expected 3%. Retail sales increased by 16.4%, with an average year-on-year increase of 3.9%. The production of new energy vehicles, industrial robots, and integrated circuits, as high-tech manufacturing areas, increased by 172.5%, 57.8%, 43.1% respectively.
Most international agencies forecast that the Chinese economy will be able to achieve growth of around 8% this year.
Last year, in the face of the downturn in world trade, China’s foreign trade continued the upward trend for 16 consecutive months. The China-Europe express train, known as the Steel Camel Team, has operated more than 40,000 trains, becoming a stable connection amid the uncertainties of the pandemic dragging down supply chains.
In the first three quarters of this year, China’s imports and exports of goods grew by 22.7%. Chinese ports yielded a throughput of 11.548 billion tons and a total of 211 million TEU containers, with growth rates of 8.9% and 9.5% respectively, highlighting the enormous resilience of Chinese supply chains and the strong global demand for Chinese products.
In 2020, trade between China and the EU reached $649.6 billion, with China becoming the EU’s No.1 trading partner for the first time. From January to September this year, trade between China and the EU reached $599.34 billion, up 30.4%.
The pandemic has highlighted the risks to global supply chains, thus accelerating relocation, regionalization, and decentralization of supply chains. As a result, multinational companies in China are constantly reconfiguring their presence. Some are leaving and others are coming.
According to relevant surveys, more than 90% of foreign-invested companies in China are optimistic about doing business in the Chinese market, as this is a consumer market with a population of 1.4 billion – more than 400 million are middle-income – of unparalleled size and growth potential, with a “magnetic attraction” to foreign investment that is growing by the day. In the first 10 months of 2021, China’s actual use of foreign capital was $142 billion, an increase of 23.4%, suggesting that China remains one of the most attractive recipients of investment in the world.
Recently, a series of actions taken by China to strengthen market regulation, aimed at promoting fair competition, correcting sectoral monopolies, and avoiding chaos in the expansion of capital, have attracted much attention. These actions have achieved positive results, in the sense that investments in technological innovation, new energies, high-end manufacturing, industrial internet of things, etc. are increasing, further expanding China’s comparative advantages in the digital economy.
The platform economy is running in a more orderly way and is bringing greater benefits to the high-quality tech development and better quality of life of the population.
Looking into the future, China will focus on development that is innovative, coordinated, green, open, open, and more fruitful, and forge a new growth paradigm with domestic circulation as the pillar, which will be strengthened by virtuous interaction between domestic and international circulation. China, while promoting its own steady and stable growth, will surely offer new opportunities for cooperation and development to the rest of the world.