China’s economy can start the second half with optimism Exclusive_China.org.cn

Author: Anna Kupanova

In the first half of this year, the Chinese economy faced many difficulties due to a turbulent international environment and a sudden relapse of COVID-19 cases in some regions of the country. However, the Chinese economy has proved resilient and still holds great potential. Moreover, the trend that appears in the second half of the year makes us more and more optimistic.

China is introducing measures to stabilize the economy

The Chinese government has successfully coordinated the fight against the virus with economic and social development. On May 23, at the executive session of the State Council, it was decided to implement 33 measures in six areas. In particular, this concerned tax policy and related measures, fiscal policy, stabilizing the supply chain, promoting consumption and efficient investment, ensuring energy security and securing livelihoods. The 33 measures include tax breaks, loan deferrals, financial support for small and micro enterprises, infrastructure investments, as well as the promotion of domestic consumption and support for particularly vulnerable people.

China remains the preferred destination for global investors

Western media recently claimed that foreign investment in China is falling as a result of a resurgence of COVID-19 cases elsewhere in China. However, this does not correspond to the facts.

Workers perform welding work in a car manufacturer’s workshop in Qingzhou city. February 28, 2021

In the first four months of this year, China received $ 74.47 billion in foreign investment, an increase of 26.1 percent. Every year. In the same period, 185 large projects with foreign investments worth over USD 100 million were contracted. These figures show once again and very clearly that China remains the preferred destination for global investors.

Kurt Wee, CEO of Singapore-based biotechnology company Celligenics, also encouraged foreign companies to remain optimistic and to consolidate or continue operations in China. “China will continue to improve and grow at an accelerated pace. A market that is evolving so fast and is so huge is a lifetime opportunity for them (the companies). “

China’s economic foundations remain solid

Although the Chinese economy did struggle in the first half of this year, it is still too early to speak of a slowdown in economic growth. China’s track record clearly shows that the foundations for economic growth remain solid.

Despite the unpromising global forecasts, China’s gross domestic product (GDP) increased by 4.8% in the first quarter of 2022. year on year, even faster than in the fourth quarter of 2021. In the current national and international situation, this growth is by no means easily available. In addition, from January to April this year, China’s total imports and exports reached 12.58 trillion yuan – also down 7.9 percent. more than year to year. All this shows that China is able to minimize the negative impact of the virus outbreak on foreign trade.

In addition, China currently has the largest middle-income population in the world, which of course holds great potential for companies operating in China.

So it can be said without a doubt: the foundations of the Chinese economy remain unchanged, as well as the general trend of economic transformation and high-level modernization and development.

China is a bastion of stability in global supply chains

While the United States and other Western countries are currently struggling with supply chain disruptions due to labor shortages and massive backlogs in the supply of goods in many ports, China is currently playing one of them thanks to a strong industrial base, stable supply chains and epidemic prevention measures backed by solid scientific knowledge plays a particularly important role in maintaining global stability.

As the COVID-19 pandemic began to rage around the world, it was China that quickly contained the epidemic, making a significant contribution to stabilizing a disrupted global supply chain. China has “ensured that everything from iPhones and Tesla to fertilizers and auto parts continues to flow from the country to the rest of the world,” according to a Bloomberg article on the subject.

Ensure future growth through high-quality development

Moreover, China is always trying to lay the foundations for future growth in time. For example, the country has committed itself to continuously improving its innovation capacity. It is a strong support for promoting a new model of development and high-quality development.

Last year, Chinese investment in research and development (R&D) totaled 2.79 trillion yuan, representing 2.44 percent of their GDP, and ranks second in the world. This is a new record for China in terms of total R&D investment.

Carol Liao, chairman of The Boston Consulting Group China (BCG China), said: “China is moving from rapid growth to high-quality development, which creates tremendous opportunities for companies.”

Overall, the Chinese economy has great resilience, great potential and great room for maneuver. This will become even more apparent to everyone in the second half of the year.

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