China's high-quality economic development gathers pace

China Plus Published: 2019-09-16 21:41:47
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Note: The following article is taken from the Chinese-language "Commentaries on International Affairs."

According to data released by the National Bureau of Statistics of China, the country’s economy was operating within an acceptable range in the first eight months of this year, with no change in structural optimization. The steady and positive trend continues. Over the recently ended Mid-Autumn Festival holiday, the total number of tourists engaged in domestic travel exceeded 100 million, a year-on-year increase of 7.6%, and domestic tourism revenue increased by 8.7% year-on-year. This shows that domestic demand is releasing huge potential, and that the positive factors promoting the high-quality development of China's economy have been building consistently.

[Photo: VCG]

[Photo: VCG]

In the first eight months, China's main economic indicators have either risen or fallen compared with the previous seven months, but the figures have remained generally stable. This is reflected in the fact that the service industry production index increased by 7.0%, and the added value of industrial enterprises above a designated size increased by 5.6%, indicating that overall production was stable; total retail sales of consumer goods increased by 8.2%, and fixed asset investment increased by 5.5%, indicating that domestic demand continued to expand. In addition, the CPI increase continues to be within the full-year target, and foreign trade and foreign investment is still growing rapidly.

As China continues the process towards high-quality development, a slowdown in the economy during adjustment is inevitable. At the same time, the continued optimization of the economic structure has become a major highlight. In the first eight months, from the perspective of industrial structure, the growth of the information technology sector, leasing and business service industries has been significantly faster than that of service industries overall. The growth rate in high-tech manufacturing industry added value was also much faster than the overall growth rate of industrial added value above a designated size, showing that the modern service industry is growing well with an obvious industrial upgrading trend. From the perspective of demand structure, online retail sales of physical goods increased by 20.8%, faster than the growth rate of total retail sales of consumer goods by 12.6 percentage points; the growth rate of high-tech manufacturing and high-tech service investment was respectively 6.5 and 9.4 percentage points faster than total investments. The proportion of general trade imports and exports as compared to total imports and exports increased by 1 percentage point year-on-year, indicating that the demand structure is continuously being optimized.

A major positive factor in China’s stable economic growth is that the level of employment continues to increase. In the first eight months, China’s urban new jobs reached 89.5% of the target set for the year. The unemployment rate in a survey of urban areas in August was 5.2%, down 0.1 percentage point from the previous month. Increased levels of employment have laid a solid foundation for the high-quality development of China's economy.

In addition, the average daily number of newly registered enterprises in China in the first eight months reached more than 19,000, and the strong entrepreneurial enthusiasm of the Chinese people has added to the country's inexhaustible development momentum. In the first eight months, China’s actual use of foreign investment increased by 6.9%, indicating that more foreign companies are willing to participate in the high-quality development of the Chinese economy and share in its opportunities.

Against the background of the current global protectionism and unilateralism and the overall slowdown in world economic growth, China's economy remained generally stable, and made progress in the first eight months of the year. It also showed great resilience and potential to the outside world. This is due to the Chinese government's adoption of a series of measures to continuously release the policy dividend. For example, China will reduce the burden of corporate tax and social security contributions by nearly 2 trillion yuan this year. The country will improve the loan market quotation rate (LPR) formation mechanism and lower the deposit reserve ratio of financial institutions so that the actual cost of social financing will be reduced. China has further reduced the negative lists for foreign investment, continuously improved and promoted laws and regulations for system-based opening-up, enacted the Foreign Investment Law, and established the Shenzhen Pioneer Demonstration Zone, the Shanghai Free Trade Zone’s Lingang New Area and six additional free trade zones. The measures have provided a good environment for investors and enhanced the vitality of major Chinese market players.

For a long time, Chinese companies have always insisted on innovation-driven growth, constantly accelerating transformation and upgrading, and providing an endogenous driving force for the national economy to achieve high-quality development. In Shenzhen, innovation has become a common consensus among enterprises. In 2018, the number of patent applications under the PCT (International Patent System) in Shenzhen reached 18,000, ranking first in the country for 15 consecutive years. In the Fortune Global 500 list of 2019, the number of Chinese companies surpassed those from the United States for the first time. Among the newly released list of China’s top 500 public companies, their combined revenues were nearly 80 trillion yuan, up 11.1% year-on-year; their total assets were valued at nearly 300 trillion yuan, up more than 9% year-on-year; their Research and Development spending was 976.548 billion yuan, an increase of 21.7% year-on-year... These figures have showed the continuous improvement of Chinese enterprises' competitiveness and strong support for the Chinese economy.

In the face of uncertainties in the world economy, China will continue to maintain the continuity and stability of macroeconomic policies in the future, overcome various risk challenges, continuously achieve high-quality development, and continue to inject stability expectations for world economic growth.

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LU Xiankun Professor LU Xiankun is Managing Director of LEDECO Geneva and Associate Partner of IDEAS Centre Geneva. He is Emeritus Professor of China Institute for WTO Studies of the University of International Business and Economics (UIBE) and Wuhan University (WHU) of China and visiting professor or senior research fellow of some other universities and think tanks in China and Europe. He also sits in management of some international business associations and companies, including as Senior Vice President of Shenzhen UEB Technology LTD., a leading e-commerce company of China. Previously, Mr. LU was senior official of Chinese Ministry of Commerce and senior diplomat posted in Europe, including in Geneva as Counsellor and Head of Division of the Permanent Mission of China to the WTO and in Brussels as Commercial Secretary of the Permanent Mission of China to the EU. Benjamin Cavender Benjamin Cavender is a Shanghai based consultant with more than 11 years of experience helping companies understand consumer behavior and develop go to market strategies for China. He is a frequent speaker on economic and consumer trends in China and is often featured on CNBC, Bloomberg, and Channel News Asia. Sara Hsu Sara Hsu is an associate professor from the State University of New York at New Paltz. She is a regular commentator on Chinese economy. Xu Qinduo Xu Qinduo is CRI's former chief correspondent to Washington DC, the United States. He works as the producer, host and commentator for TODAY, a flagship talk show on current affairs. Mr. Xu contributes regularly to English-language newspapers including Shenzhen Daily and Global Times as well as Chinese-language radio and TV services. Lin Shaowen A radio person, Mr. Lin Shaowen is strongly interested in international relations and Chinese politics. As China is quite often misunderstood in the rest of the world, he feels the need to better present the true picture of the country, the policies and meanings. So he talks a lot and is often seen debating. Then friends find a critical Lin Shaowen criticizing and criticized. George N. Tzogopoulos Dr George N. Tzogopoulos is an expert in media and politics/international relations as well as Chinese affairs. He is Senior Research Fellow at the Centre International de Européenne (CIFE) and Visiting Lecturer at the European Institute affiliated with it and is teaching international relations at the Department of Law of the Democritus University of Thrace. George is the author of two books: US Foreign Policy in the European Media: Framing the Rise and Fall of Neoconservatism (IB TAURIS) and The Greek Crisis in the Media: Stereotyping in the International Press (Ashgate) as well as the founder of chinaandgreece.com, an institutional partner of CRI Greek. David Morris David Morris is the Pacific Islands Trade and Investment Commissioner in China, a former Australian diplomat and senior political adviser. Harvey Dzodin After a distinguished career in the US government and American media Dr. Harvey Dzodin is now a Beijing-based freelance columnist for several media outlets. While living in Beijing, he has published over 200 columns with an emphasis on arts, culture and the Belt & Road initiative. He is also a sought-after speaker and advisor in China and abroad. He currently serves as Nonresident Research Fellow of the think tank Center for China and Globalization and Senior Advisor of Tsinghua University National Image Research Center specializing in city branding. Dr. Dzodin was a political appointee of President Jimmy Carter and served as lawyer to a presidential commission. Upon the nomination of the White House and the US State Department he served at the United Nations Office in Vienna, Austria. He was Director and Vice President of the ABC Television in New York for more than two decades.