Home Economy China’s 2016 GDP wins historic record growth

China’s 2016 GDP wins historic record growth

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  • How govt lifted 12.4m out of poverty in one year

By Ikenna Emewu

Next year would be 40 years of China’s economic miracle called the Reforms and Opening Up era. The quantum leap this vast nation made in the period has become world’s paramount economic record. Prior to China’s rise and up till now, there is no record of any country’s economy growing at sustained pace of 7.5% for 40 consecutive years.

So far, this is 39 years of the opening up and reforms and even if her economy dwindles to zero growth next year, she would still have sustained an average growth of about 9.2%, quite unprecedented, and little wonder the country stands out as the world’s most vibrant economy. China’s economy growth at a rate of 6.7% last year, the same rate as in 2015 has placed it above every known economic growth record in history. Yet, these few years are called the slow era of the country’s economy that at a time between the mid 80s and late 90s sustained a blistering average of about 12%. And so far, predictions of a hard landing for the economy after the slow down started in 2014 have remained unfounded even when the country still boasts of contributing about 33% of the global economic pool due to its vast foreign direct outbound investment. Last year, the country grossed about US$165b FDI which is partly a way of tackling the overcapacity challenge it faces in so many sectors especially automobile, cement, iron and steel where China produces 49% of the world total volume.

As the annual Chinese political ritual holds, called the Two Sessions (Lianghui) comprising the sitting and policy making process of the National People’s Congress (NPC) and the China People’s Political Consultative Congress (CPPCC), Premier Li Keqiang briefed the nation on the political development of last year and also announced the agenda for the current year on March 5.

He noted that: “In the past year, China’s development has faced grave challenges posed by a great many problems and interwoven risks and dangers both at home and abroad.

However, under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core, we the Chinese people have risen to the challenge and worked hard to press ahead, driving forward sustained, healthy economic and social development.”

Regarding the economy of China, one of the most important to the world and indeed the most influential to the poorer countries including Nigeria with the upswing of China’s assistance to them, Premier Li assured that: “The economy has registered a slower but stable performance with good momentum for growth.

GDP reached 74.4 trillion yuan, representing 6.7-percent growth, and seeing China outpace most other economies. China contributed more than 30 percent of global growth. The CPI rose by 2 percent. With an 8.5-percent increase in profits, industrial enterprises reversed the previous year’s negative growth of 2.3 percent. Energy consumption per unit of GDP fell by 5 percent. Economic performance improved markedly in quality and returns.”

At the micro economy level, he explained that: “Employment growth exceeded projections.

A total of 13.14 million new urban jobs were added over the course of the year. The number of college graduates finding employment or starting businesses reached another record high. The registered urban unemployment rate stood at 4.02 percent at year-end 2016, the lowest level in years. For China, a large developing country with a population of over 1.3 billion, attaining this level of employment is no easy task.

Further, “breakthroughs were made in reforms in major sectors and key links, and initial success was achieved in supply-side structural reform. New measures were introduced for opening China up, rapid progress was made in pursuing the Belt and Road Initiative, and a number of major projects and industrial-capacity cooperation projects with other countries were launched.”

 

Also, the Chinese ambassador to Nigeria, Dr. Zhou Pingjian told Daily Sun that China’s achievements came in diverse forms and entrenched stability in growth though that has been lower than the previous years of boom and mega growth. He noted that: “China achieved a good start last year in its full implementation of its 13th Five-Year Plan on National Economic and Social Development (2016-2020). Under this context, this year’s two sessions are in the spotlight globally.”

 

Africa and Nigeria

Ambassador Zhou brought the issue closer to how China’s present state of economy and policies affect other worlds and said: “in 2016 against a sluggish global economy, lower than the previous several years, but tops all other major economies. IMF’s World Economic Outlook shows that China contributed 39% of global economic growth last year. Rapid growth in China has been a sustained, powerful engine for global economic stability and expansion. China created more than 13 million urban jobs, lifted more than 12 million rural residents out of poverty and attracted more than $130 billion Foreign Direct Investment (FDI) in 2016. These are signs of better global confidence in China’s economy.

Today’s China has become world’s second largest economy, second largest source of FDI, largest goods trading country, largest tourist market and largest trading partner of more than 120 countries and regions.

“Moreover, more opportunities exist in China in 2017 for Africa as China will oppose protectionism in all forms and guide economic globalization toward more inclusiveness, mutual benefit, justice and equity. China will elevate its cooperation with developing countries and provide constructive plans to resolve global and regional hotspot issues.”

For 2016 alone, China made $170.1 billion outbound direct investment ODI and Chinese tourists made over 120 million overseas visits. Africa is among the main destinations of China’s investment and tourists. Since China is advancing its supply-side structural reform, there is a growing need for her to relocate its overcapacity externally, while Africa is resolving its under capacity assiduously. This is an unprecedented opportunity for China and Africa to synergize their development strategies and make Africa’s long-cherished industrialization dream come true.

“Nearly half of the $ 60 billion funding support that China pledged to Africa has been disbursed or arranged. The Abuja-Kaduna Railway has been completed; the Lagos-Ibadan has been broken the ground. Steady progress is being made in a number of industrial parks or free trade zones across Africa. Responding to Africa’s needs, China-Africa cooperation is undergoing three shifts: from government-driven to market-driven, from trade in goods to cooperation on production capacity, and from engineering contracts to capital investment and operations. These three shifts will provide new momentum and opportunities for Africa’s sustainable development.

As this round of FOCAC (2016-2018) is going to be concluded next year, 2017 is a key year to implement the ten cooperation plans and make full use of $60 billion funding support to the fullest extent.

As Acting President of Nigeria Professor Osinbajo stressed March 7th on the occasion of Lagos-Ibadan Railway Groundbreaking Ceremony, “the Chinese Government has always proved to be a reliable partner to Nigeria.”

 

Important to Nigeria

On what should be very important to Nigeria and Africa, China has sustained progressive action in poverty reduction over the years and works towards a target of totally eradicating poverty in 2020, a task President Xi admitted in his address to the government of Sichuan Province on March 9 was really challenging. While he urged the government down to the county levels to do more to actualize that dream, he noted that whereas the country lifted 12.4m out of poverty last year, its target this year in the policy plan is 10m citizens. Among them, close to one million would be relocated from their present abode that are adjudged inhuman and the cause of their poverty.

Prior to China’s economic reform policies starting 39 years ago, the country had over 760m poor people or about 65% of the population and that had been scaled down to about 46m last year, and contributed to some amazing 92% of the UN poverty reduction success and the only country that met the UNDP MDG on poverty reduction in 2014.

 

Throwing more light on how China’s 2017 policies would impact the global economy and diplomacy, the Foreign Minister, Wang Yio in his address to the media on March 8 explained that: “Wang Yi: In about two months’ time, we’ll hold the Belt and Road Forum for International Cooperation in Beijing. We foresee that the heads of state and government from over 20 countries, the leaders of over 50 international organizations, over 100 ministerial-level officials and around 1,200 delegates from different countries and regions participating in the forum. In addition to the Leaders Roundtable, there will also be a High-Level Dialogue and six parallel panel discussions on the connectivity of policy, infrastructure, trade, finance and people. Beijing will once again be the center of global attention; the Belt and Road Initiative will continue to be a hot topic around the world.”

As the world watches China, the challenge is Nigeria’s in her relationship with the wealthy country that seeks to assist a country that is ready to tackle poverty and industrialize.

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