China’s economic performance last year reinforces confidence in 2019

Note: The following is an edited translation of a commentary from the Chinese-language "Commentaries on International Affairs."

If you were to judge the health of China’s economy last year by the reports you saw in parts of the Western press, you could be forgiven for thinking that 2018 was a terrible year for China’s economy. Against the backdrop of escalating trade frictions and growing downward pressure on the domestic economy, it seemed like not a week went by when there wasn’t newspaper pundits or talking heads on cable television keen to talk down China’s economy.

These naysayers received a firm reply from China’s State Council on Friday when it announced that all of the 36 quantitative goals set in last year’s Government Work Report had been reached.

Sun Zongxia, a grain grower in the village of Guiyi, Shandong Province, harvests paddy rice on October 21, 2018. [Photo: Xinhua]

The figures released by the government show that the economy grew by 6.6 percent, which is in line with the predictions of a slew of international institutions including the International Monetary Fund and the World Bank. The GDP growth rate, consumer price index, energy consumption per unit of GDP, and the deficit as a percentage of GDP were all in accordance with the projections. The number of new urban jobs exceeded expectations: it surpassed 13 million, which is almost one-quarter more than last year’s target. Poverty alleviation efforts also broke through expectations, with up to 14 million more people lifted out of poverty, nearly two-fifths higher than the original goal.

These results add to the picture that comes from the figures released by the National Bureau of Statistics on Thursday, which showed that power generation, freight volumes, and tax revenues were all up 6 to 7 percent from where they were a year ago.

China’s economic achievements in 2018 owed a lot to the government’s effort to adjust the structure of the country’s economic growth and accelerate its industrial transformation and upgrading. It did this by introducing policies that helped to optimize the business environment, relax market access for the service industry, and strengthen protections of intellectual property rights.

As the nation prepares for the Two Sessions this month - the annual meetings of the national legislature and the top political advisory body – the public’s attention is turning to the imminent release of the government’s work report for the coming year. The report will play a major role in setting the agenda for the year ahead. And the clear goals that it details play an important role in keeping the government accountable.

Looking ahead, it’s fair to say that this year will have its challenges. Predictions of a broad global economic slowdown have to be taken into account, along with the challenge of balancing economic growth with the government’s ongoing efforts to improve the protection of the environment. But the country’s performance in 2018 is a source of confidence that China stands ready to overcome those difficulties.