By Lu Yanan, People’s Daily
Doubts and anxieties over China’s economic growth are rising as the structural contradictions emerges during the country’s economic progress and the China-US trade frictions further escalate.
It is not enough to confirm whether a person is healthy or not only by examining his symptoms and individual organs. Similarly, the stability of an economy is another important index in addition to the growth rate in the examination of whether the economy is healthy.
In the first half of 2018, the Chinese economy grew by 6.8 percent, registering a steady growth remaining between 6.7 and 6.9 percent, a fluctuation of only 0.2 percentage points in 12 consecutive quarters.
Such economic performance was achieved based on a more-than-80 trillion yuan economic aggregate. It indicates the solid foundation of Chinese economy.
In the first 8 months, China fulfilled 90 percent of its annual target to create urban employment. Consumer prices rose at a mild speed and the foreign currency reserve holdings remained above $3 trillion. In addition, the main macroeconomic indicators were all kept within a reasonable range, indicating a positive economic confidence.
The world’s second largest economy now sees a new normal of economic development. The quality, structure and efficacy of the Chinese economy, compared with the continuous expansion of the size, are more important coefficients to evaluate the Chinese economy.
Since this year, China saw a slowing growth of investment in infrastructure construction and a year-on-year decline of housing prices in first-tier cities. However, the growth of investment in manufacturing and private sectors continued rising, and the growth of investment in high-tech sector was also soaring.
It means that the replacement of outdated capacity by the advanced has been accelerated, and good supply has been in sound cultivation.
The market demand is also expanding and consumption upgrades vigorously. In addition to the steady growth of the total retail sales of consumer goods, an explosive growth was continuously seen in service-oriented consumption including education, culture and sports which were previously not even included in the statistics.
In the first half of this year, the contribution of final consumption to the Chinese economic growth was 78.5 percent, and domestic demand has turned into a more powerful pushing hand for growth.
The huge demand for consumption upgrading will be continuously released as the size of the country’s middle-income earners keeps expanding, which also indicates a more steady economic growth.
Innovation has become a strong driving force of the Chinese economy. So far, the number of Chinese market entities has surpassed 100 million. New driving forces are contributing to more than one third of national economy, and the value of the country’s managed innovation investment is approaching 2 trillion yuan, making China the second largest innovation investment market in the world.
As innovation and entrepreneurship have become more comprehensive and been upgraded into mechanisms in China, more room is left for high-quality development to maneuver. These factors are “bonus points” to ensure its steady growth.
China has plenty of economic tools and rich experiences. Over the past 40 years of reform and opening-up, the country has managed to cope with the Asia financial crisis and global financial crisis, as well as a series of other external impacts. It is because of the composure to deal with these risks that China has gained rich experiences in this aspect that allow it to face and conquer various risks.
A survey by the People’s Bank of China (PBOC) indicated that the entrepreneur confidence index was 71.1 percent in the third quarter, 2.4 percentage points higher from a year ago.
The PBOC found 26 percent of urban residents were inclined to consume more, up by 1.3 percentage points in the last quarter. The Chinese enterprises are confident and the market prospects steady, which serves as the best ballast stone for the country’s economy.