GT Voice: China injects most certainty into struggling global economy

A view of Beijing Photo: VCG

The Atlantic Council and Rhodium Group said in a latest report assessing China’s economic development that the country’s progress in implementing market reforms had become “stalled”, the South China Morning Post reported on Thursday.

The report, which acknowledged that China was still performing well in some measured categories, comes amid the rise of a new wave of Western public opinion disparaging China’s economy. The IMF on Tuesday lowered its estimate of China’s economic growth this year, saying the country’s slowdown is one of three major headwinds facing the global economy.

In a world undergoing profound change unprecedented for a century, the Chinese economy is indeed facing strong downward pressure. But it must be seen that China’s solid economic fundamentals, extremely large economic volume and long-term development momentum have been a point of resilience to allow the economy to emerge from global headwinds.

As the only country in the world with a complete industrial system, China’s industrial chain is still well integrated and irreplaceable, while China’s performance in foreign trade and attracting foreign investment still maintains solid growth. . All of this reflects the certainty inherent in the Chinese economy. Therefore, China is still the most stable large-scale economy, injecting the most certainty into the global economy mired in great uncertainty and difficulty.

It is undeniable that China’s economic development is facing uncertainties, which have been closely related to complex and heavy changes in the world. Since the beginning of this year, with the outbreak of major geopolitical events not seen in decades, a series of Western measures led by the United States in the political and economic aspects have further exacerbated the uncertainties.

The resulting global economic chaos and turmoil, including the technological restrictions imposed by the United States on China, will inevitably have an impact on China’s industrial chain, supply chain and economic development. China is well aware of these difficulties and impacts. Therefore, how to ensure economic and social stability by minimizing negative shocks is the most urgent task facing the Chinese economy.

Indeed, China is not badly prepared for shock waves from the outside world. To some extent, China’s ongoing transformation from an investment-oriented and export-oriented economy to a consumption-oriented economy is one of the answers, which aims to pursue high-quality growth.

It should be noted that in the process of transformation, the Chinese government has proposed a dual circulation strategy, which means that the country will not only strengthen support for external circulation, but also vigorously promote the construction of internal circulation. In essence, internal circulation is about making consumption a new engine that is supposed to be equivalent to the role of exports in China’s economic growth.

The global economy is expected to face stronger headwinds and could even enter a recession next year. With the bleak prospect of a significant contraction in the global market as well as US-led decoupling and containment targeting China, it is more critical than ever for China to maintain global stability by fully stimulating the potential of its indoor market.

Of course, building an economic system that is immune to external shocks is not something that can be done in the short term, and a lot of work remains to be done. For example, in April, China unveiled guidelines for accelerating the construction of a unified national market, envisioning breaking down local protection and market fragmentation and unlocking key bottlenecks that weigh on internal circulation.

In addition, China will continue to adhere to the fundamental national policy of reform and opening up and roll out measures that can be adapted to the new situation. It is believed that once China deepens its domestic market reform and the consumption potential of the unified national market is fully stimulated, China’s economic growth potential will be further unleashed.

For Western institutions and scholars, without a full understanding of the environment and challenges facing China, they will never be able to correctly interpret China’s policy intentions and that is how errors of judgment were generated in most cases.

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