High-quality development of Chinese economy a boon for the world

Published: March 30,2024

Kazakh President Kassym-Jomart Tokayev delivers a speech at the opening ceremony of the Boao Forum for Asia Annual Conference 2024 in Boao, south China’s Hainan Province, March 28, 2024. (Xinhua/Guo Cheng)

The high-quality development pursued by China amid its drive to grow new quality productive forces will continue to unleash great potential for growth and business opportunities for multinational companies, according to distinguished speakers at the Boao Forum for Asia (BFA) Annual Conference 2024.

The speakers were attending a panel discussion on the outlook of the Chinese economy during the conference, which runs from March 26 to 29 in Boao, a resort town in southern China’s Hainan Province. During the fast-paced hour-long session, the discussion was kicked off with mention that the world’s second-largest economy achieved 5.2 percent growth last year, despite the economy being weighed down by the real estate sector and a sluggish global economy, with the panelists agreeing it was not “too bad.” They also made one point crystal clear — strong and sustainable growth in China holds great significance for both the country, and the world. “

Last year, China by itself contributed around one third of global growth. Our research also shows that for every one percentage point faster in China’s growth, that raises on average the level of GDP in other economies in the medium term by about 0.3 percent,” said Steven Alan Barnett, senior resident representative in China of the International Monetary Fund (IMF).

When commenting on China’s economic performance last year, “solid” and “outstanding” were the two words used by Vivian Jiang, Chair of Deloitte China. “Even though the Chinese economy grew at a lower rate compared to years ago, what needs to be seen is that the quality of growth in China continues to improve.” “For instance, the growth of expenditures on research and development in China last year rose by 8.4 percent year on year, which was a much faster growth compared to the GDP growth, and this is important data for us as a professional services agency. 

The fast R&D spending growth means continued momentum for the Chinese economy going forward,” she said. The Chinese government has set an economic growth target of around 5 percent for 2024. “The 5 percent growth target, I believe, is a goal China can achieve. In the first two months of this year, we already saw that most economic indicators were a lot better compared to the same period last year,” said Liu Qiao, professor of finance and dean of Guanghua School of Management, Peking University. 

Government data showed that in the first two months of 2024, China saw its imports and exports reach 6.6 trillion yuan (about 930 billion U.S. dollars), a historical high for the same period. Meanwhile, some 7,160 new foreign-invested firms were set up across China during the same period, up 34.9 percent year on year, the highest increase in nearly five years.

Liu said that the data from the beginning months of the year to some extent helped shore up confidence in the Chinese economy’s overall growth for the whole year. Amid concerns about the property sector’s drag on the Chinese economy, Albert Park, chief economist with the Asian Development Bank, said that the falling property prices in China were a downside risk, but the Chinese government has done a good job trying to manage the leveraging of the sector to address the longstanding imbalance between supply and demand. China rolled out a raft of pro-growth measures last year, including those for the property sector such as cutting down the down payment ratio and easing rules on old policies that had restricted home purchase transactions when home prices were soaring. “I think going forward this year and even beyond, the key part of the pivot to a high-quality development model is to continue to have consumption and be a key driver of growth,” Barnett said, adding that China still has great potential for consumption growth.

Vivian Jiang, during her part, said that China’s biggest confidence was its huge market, whether you look at its consumption or its digitalization and transformation efforts in traditional industries. The government has recently announced a plan to promote large-scale equipment upgrades and trade-in of consumer goods, as part of its efforts to boost domestic demand and support continuous economic growth this year. “

This is a tailored measure that reflects China’s transition toward green and low-carbon development, and digitalization, as well as its pursuit for becoming more intelligent. This measure is also expected to be equipped with other auxiliary supportive policies, including those from the financial sector, to promote the overall industrial upgrade in the country,” she said. In China’s economic transformation and upgrading, “limitless” business scenarios and opportunities for multinational companies, big or small, are there to grow together with China, she said. 

Xinhua