Latest figures show that China’s GDP for the first half registers a year-on-year increase of 6.3 percent, showing that China’s economy is still steadily progressing amid complex and grim economic situations across the globe.
In a commentary published earlier by the People’s Daily, Wu Changqi, Professor at the Guanghua School of Management, Peking University, said that the Chinese economy, while developing steadily, is also growing more resistant to risks.
According to Wu, China’s economy has been threatened by multiple external crises in the past 40-plus years, but it maintained healthy growth.
The 2008 financial crisis severely harmed developed countries’ economies as well as newly emerged economies. However, China’s GDP in 2009 rose by more than nine percent.
Wu highlighted the constant increase of total-factor productivity (TFP) as the key behind the Chinese economy’s strength. The reform and opening up and the establishment of the market mechanism have been boosting China’s productivity and human labor costs. Meanwhile, further opening up and improvements in the business environment are making China an increasingly attractive destination for global capital. A huge number of enterprises from developed countries have invested in China, and domestic companies are also striving to innovate and boost production efficiency, making China the world’s factory. With further improvements in the market environment, a wider range of activities in global value chains are happening in China. In addition to processing and assembling, China is creating values in fields from research and development, design, procurement to logistics.
People’s desires for better lives and consumption upgrades serve as a momentum for the sound development of China’s economy. From cars, mobile phones to fast-moving consumer goods and luxurious goods, China has experienced a leapfrog development in effective demand over the past ten-plus years, and such demand is still growing. Meanwhile, growing internal demand will also play a key role in stimulating and stabilizing economic growth.
Fast development of urbanization and modernized, intensive agriculture has been enhancing agriculture productivity, bringing forth a vast market.
NEW TECHNOLOGIES FURTHER BOOST TFP
Chinese companies and consumers have also been embracing the new technology revolution and reaping the benefits at a fast pace. With e-commerce and delivery leading the pack, China’s modern logistics industry is growing fast with the support of the Internet of things and big data, kicking off a revolution in digital finance. As the world’s factory, China’s manufacturing industry is also experiencing a digitized upgrade, which will further boost the country’s TFP and, in turn, setting a more solid foundation for China’s economic development.
AMPLE SPACE FOR REFORM, DEVELOPMENT
Despite China’s rapid economic development, the country’s GDP per capita is still at the world’s medium level, and there’s still ample space for reform and development. With deeper reform in the economic system to unleash more productivity, the Chinese economy will become more energetic and resilient in the future.