China's economy remains resilient

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By XIE FENG*

Many Americans realized that the notion that China could collapse economic e the USA still thriving is an absolute fantasy

The Chinese economy has been in the headlines recently. How is it really going? Better than you can imagine. Allow me to share some facts.

This year, China's economy continues to recover and grow. Our Gross Domestic Product (GDP) expanded 5,5% in the first half of the year, surpassing most major economies. The World Bank has projected that China's economy will grow 5,6% in 2023. The Organization for Economic Co-operation and Development expects 5,4% and the International Monetary Fund projects 5,2%. As has been the case for many years, China continues to be an important engine of global growth.

One of the highlights of the first half of 2023 is the recovery in consumption, which contributed to 77,2% growth, more than 44 percentage points above last year. I highlight that people are spending more on services: from January to July, retail sales in transport, accommodation, restaurants and other services grew 20,3% in annual terms. Around 502 million Chinese went to the cinema this summer – more than the entire US population.

China's economy is also significantly greener and more innovation-oriented than in the past. In the first seven months of 2023, investment in high-tech industries and research and technical services increased 11,5% e 23,1% respectively. In July, production of new energy vehicles, wind turbines and charging facilities increased by about a quarter. China's renewable energy generation capacity exceeded its coal power production capacity. Its installed wind and solar energy capacity has led the world for 13 and eight years, respectively.

Foreign trade remains resilient. China continues to occupy around 14% of the global export market. Chinese exports of electric vehicles, lithium-ion batteries and solar cells increased 61,6% in the first six months of 2023. As demand continues to recover domestically, China will also import more.

International companies moved according to their most immediate interests. Although transnational investment is weak globally, foreign investment in China continues. France, Great Britain, Japan and Germany boosted investment in China in the first half of 2023 by 173,3%, 135,3%, 53% and 14,2%, respectively. About 24 thousand new foreign companies were established in China in the same period, an increase of 35,7% compared to the previous year. Half of Tesla's global deliveries came from its Shanghai gigafactory last year, which launches an EV every 40 seconds on average. Starbucks currently operates more than 6.500 stores in China, opening one almost every nine o'clock.

And let's not forget: China's middle-income group – more than 400 million people today – is on track to surpass 800 million by 2035. As China continues to improve consumption, ease market access, optimizing the business environment and strengthening supply and industrial chains, the fundamentals underpinning its long-term growth remain unchanged.

It is clear that the road to post-Covid recovery will not be smooth. There will be varied progress, often with twists and turns. In China, we don't shy away from problems. Instead, we address them head-on.

In recent months, China has implemented new policies to reinvigorate consumption, boost the private sector e attract more foreign investment. One of our priorities is to prevent and neutralize financial risks, including policies that guarantee the stable and solid development of the real estate industry. Little by little these efforts are showing results. With broad scope in our policy toolkit, we are confident we can prevent systemic risks.

According to BCA Research, China was the source of more than 40% of global growth over the last decade, compared to 22% for the United States and 9% for the eurozone. For many years some people have dismissed China's contribution to global growth – or even extolled the “threat” of a growing China. Now, as China is undergoing temporary economic adjustments, some blame China for dragging the global economy down; others defend the theory that “China could collapse”. This is fair?

This is a challenging time for everyone. The world has not yet recovered from the trauma caused by the coronavirus pandemic. coronavirus. crisis in ukraine it drags. The global recovery remains slow and each country has its own problems to solve.

It would be shortsighted and even dangerous to sit idly by, boast, or even make things more difficult for others. In a globalized era, bad news for anyone is bad news for everyone. Countries need to come together to promote economic globalization and build a community with a shared future for humanity, where no one is left behind.

More American friends realized that the notion that China could collapse economically and the US still prosper is an absolute fantasy. The United States needs to lift technology export controls, investment restrictions, economic sanctions and high tariffs against China. They must stop building parallel systems and seek to decouple in the name of “risk reduction”, which would only further complicate an already arduous global recovery.

Instead, China and the United States should respect each other, coexist in peace and pursue win-win cooperation. This is the only way forward. And the world expects no less.

*Xie Feng is China's ambassador to the United States.

Translation: Arthur Scavone.

Originally published on The Washington Post.


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