Spotlight: Foreign minds urge rationality in understanding Chinese economy

Source: Xinhua| 2019-02-07 20:22:06|Editor: Yurou
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LONDON, Feb. 7 (Xinhua) -- China's economy registered a growth of 6.6 percent in 2018 and some media organizations thereafter began to habitually and unfairly overstate the slowdown. Figures matter, but experts called for looking from a broader perspective so as to see a complete picture.


On Jan. 21, the very day China released its GDP figures, The Wall Street Journal published a story headlined "China's Annual Economic Growth Rate Is Slowest Since 1990," claiming China's economic expansion languished to its slowest pace in nearly three decades last year, as a bruising trade fight with the U.S. exacerbated weakness in the world's second-largest economy.

Despite a slower growth, the Chinese economy expanded to over 90 trillion yuan (about 13.3 trillion U.S. dollars) in 2018, almost tripling its size from 10 years ago, official data showed.

"China is now growing from a much larger base. But this was overlooked in the flurry of headlines about its slowdown," said an article published in The Economist in late January, under the title of "Slowness is in the eye of the beholder."

Axel Goethals, CEO of the European Institute for Asian Studies, a think tank, reckoned it was easy to record double-digit growth when China started from low-level economic development but the transition from quantitative growth to qualitative growth is much more important.

"I think this is what we observe now with China. I think still the way China is developing, and its economy is growing. I think it's still a huge achievement. I don't see any problem in that," Goethals said.

"The 9, 10 percent growth was only going to last for a short number of years, and now we are looking at the 6 percent growth," said Stephen Perry, chairman of Britain's 48 Group Club.

"It was one of the incredible wonders of the world that China has managed the transformation of its economy without any great crisis, and it is very capable," he said.


Though automobile sales declined for the first time in 2018 in over 20 years, consumption has played an increasingly important role in China's economy, contributing 76.2 percent of the GDP growth in 2018, a significant increase of 18.6 percentage points from 2017.

In addition to targeted measures to spur car sales, the Chinese government has unveiled others last month to boost consumption in the world's second largest economy, aiming to further develop its rental property market, child and elderly care services in urban areas as well as online shopping, e-commerce and tourism in rural areas.

China's individual income tax deductions will be fully underway to unlock people's spending power. The fifth-generation of cellular mobile communications technology is also expected to drive economic output and create millions of new jobs within the five years of its commercial deployment in China, according to some estimates.

"We expect consumption to remain the largest driver of the economy in the next decade," said Ding Shuang, an economist of the Standard Chartered Bank, pointing out that consumption will continue to grow faster than investment amid the ongoing trends of urbanization, aging and a rising middle-income group demanding quality goods and services.

The changing nature of China's growth also provides some cushioning from its trade frictions with the United States, because for the broader economy, foreign sales matter less than they used to, according to The Economist, noting that domestic demand more than plugged the shortfall of trade surplus last year.


"If you compare its increase of GDP to the increase in Europe, in other countries, it is huge. It is still a very positive story. Of course there are uncertainties like trade war ... Nevertheless, it is a powerhouse. I think probably citizens in the country feel this energy and enthusiasm," Irene Mia of the Economist Intelligence Unit (EIU) said.

An EIU report released in November suggested China is the most optimistic country in the world, with 91.4 percent of its citizens believing their country will become a better place in the next decade.

Media have been saying about the end of China growth for years but it has not happened yet, said British scholar Jude Woodward.

"All China can do is go on proving them wrong, and eventually they'll have to wake up to it," she said.

The West are worried about losing their control and that is why there is a lot of reaction to China's rise, Perry noted.

"I think it (the West) is misreading. What China wants to do is to become an advanced economy for its people being able to share their (country's) wealth fairly and to be a happier prosperous society," he said.