Chinese economy ascending, not peaking

China’s 2024 growth target of around 5 percent clearly indicates that its economic trajectory will continue to rise steadily.

The target is realistic and attainable amid the country’s pivot towards a pursuit of long-term prosperity featuring quality over sheer speed. It attests to the long-term uptrend of the Chinese economy.

Over the past decade, when faced with adversities like natural disasters and the COVID-19 pandemic, China’s economy has persistently ascended to achieve its development goals, showing remarkable tenacity.

resilience is underpinned by impressive figures. The country’s gross domestic product (GDP) has more than doubled from 60 trillion yuan (about 8.45 trillion U.S. dollars) in 2014 to 126 trillion yuan last year, countering the gloomy forecasts of a downturn or collapse.

Those who bemoan China’s moderated pace of growth evidently miss the broader context: a fundamental shift from high speed to medium-high growth, and the significant role the country continues to play in the global economic expansion. To realize its 2024 growth target means the world’s second-largest economy will contribute about 30 percent to global growth, reaffirming its position as a major engine of the global economy, experts say.

Early indicators for 2024 paint an optimistic picture. Robust capital expenditure, improved social financing, and a spike in consumer spending during the Spring Festival point to a promising start to the year, instilling confidence in the future.

China has a well-stocked monetary toolbox and there is still ample policy headroom to promote sound economic flows. It is unnecessary to whine that China has yet to roll out one-off bazooka-style stimuli packages, as the country prefers more sustained, quality-driven economic growth buoyed by a multitude of inherent drivers.

This year, the country will continue to implement a proactive fiscal policy and a prudent monetary policy. The agenda also includes planning new reforms for its fiscal and tax systems, an increase in the share of loans to private businesses, and the earmarking of 700 billion yuan from the central government budget for investment.

These measures not only aim to tackle current cyclical and structural issues but also underline a clear vision and design for long-term growth.

A standout example is China’s emphasis on modernizing the industrial system and developing new quality productive forces. The country will step up the development of hydrogen power, new materials, innovative drugs and other cutting-edge sectors. Fostering future-oriented industries such as quantum technology and life sciences requires dedication and patience. They are unlikely to yield immediate results but hold the promise of being substantial drivers of long-term development.

The country’s commitment to technological advancement is also evident in its spending on research and development, which reached 3.3 trillion yuan last year, up 8.1 percent from 2022, advancing its position on the global high-tech ladder and ascending the value chain.

China also relies on domestic consumption to fuel future growth. This has been supported by policies aimed at boosting household incomes and enhancing social welfare systems, thereby increasing the purchasing power of residents. The focus on domestic consumption is a strategic move that not only taps into the vast potential of the Chinese market but also reduces vulnerability to external shocks.

To further attract foreign investors, China will fully lift the restrictions on foreign investment access in the manufacturing sector this year. 

China’s foreign trade shows an encouraging sign. The total imports and exports of goods expanded 8.7 percent year on year in the first two months of 2024, with the volume hitting a record high over the same periods in history and the exports returning to double-digit growth.

[Abridged]

Xinhua Commentary