The Reality of China’s Economy

In October, people in China celebrated their “Super Golden Week”, which was a combination of the Mid-Autumn Festival and the National Day holidays.

Statistics show that during the week, China’s domestic tourism experienced a “full bloom”. 826 million domestic trips were made, an increase of 71.3 percent from last year and 4.1 percent from 2019.

The total revenue of the tourism sector increased 129.5 percent year on year and 1.5 percent from 2019 to 753.4 billion yuan (about 104.9 billion U.S. dollars) .

These fresh figures from the Super Golden Week highlight, to a certain extent, the vitality and potential of China’s economy.

China’s economy is in steady recovery. Its GDP grew by 5.2 percent year on year in the first three quarters of 2023.

We are confident in achieving our full-year growth target of around 5%. In September, China’s manufacturing purchasing managers’ index (PMI) was back into the expansion zone at 50.2, indicating growth in factory activity and a positive economic recovery.

The PMI for water transport, postal service, telecommunications, IT and financial services grew rapidly with activity indexes averaging 55 points or above. In the first three quarters, the total retail sales of consumer goods grew by 6.8 percent year on year.

According to the recent World Economic Outlook published by the IMF, China’s economic growth is expected to reach 5 percent this year. It also expects China to contribute to approximately one-third of global growth in 2023.

China is the world’s largest exporter of goods and continues to account for about 14 percent of the global export market. The total value of Chinese merchandise exports in the first three quarters of 2023 expanded 0.6 percent year on year to about 17.6 trillion RMB (2.52 trillion US dollars).

A good example is the robust growth of the China-Europe freight train services from January to July. It made 8,990 trips, transporting a total of 869,000 standard containers of goods, an increase of 4% from a year ago.

China is now a main trading partner of more than 140 countries, EU’s second-largest trading partner for goods and Denmark’s fourth largest export market.

China remains a hot spot for foreign investment. Despite the global economic slowdown and subdued cross-border investments, 33,154 new foreign-invested enterprises were established from January to August in China, a year-on-year increase of 33%.

In the first half of this year, China’s high-tech manufacturing witnessed an increase of 28.8 percent in actual FDI use, compared with the same period in the previous year. A number of developed countries boosted investment in China from January to August.

China’s industrial structure has been continuously upgraded. In the first six months of this year, investment in high-tech industries rose by 12.5% year on year, and the added value of information transmission, software and information technology services increased by 12.9%.

Meanwhile, China’s efforts toward green transformation have yielded significant results, considerably bolstering its growth. From January to June, the output of photovoltaic cells, wind turbines, and hydroelectric generators increased by 54.5%, 48.1%, and 32.3% year on year respectively.

In the first eight months of this year, China’s total electric vehicle output and sales stood at 5.434 million and 5.374 million units respectively, leaping by 36.9% and 39.2% over the previous year.

There is no denying that China is facing difficulties and challenges, as the world economy is experiencing more downward pressure and multiple challenges grow for global sustainable development. The foundation for stable growth still needs to be consolidated and the task of maintaining employment stability is demanding.

Some difficulties and hidden dangers in the real estate market have been exposed recently. Certain big real estate companies are facing some degrees of debt risks. Recently China has issued a series of measures to boost the property market, such as lower first-home loan rates and extend tax incentives.

As a result, trading in the real estate market has become brisker. In September, the total sales of the country’s top 100 real estate developers surged 24.8 percent month on month. The market confidence and business expectations for real estate industry will gradually rise in the near future.

Looking into the history, China’s economy has experienced many difficult situations. During the Asian financial crisis in 1998 and the international financial crisis in 2008, China’s economy managed to stay firm and became stronger through reforms.

Economic recovery is a process of wave-like development and tortuous progress. We have a strong belief that with a supersize demand market, a full-fledged industrial system, and abundant, high-caliber labor force and entrepreneurs, China’s economy has tremendous resilience and potential for high-quality development, and its long-term sound fundamentals remain unchanged.

A new type of economic globalization is essential for building a global community of shared future. The biggest risk stems from non-cooperation and the biggest hidden security threat is non-development. China is against trade walls, decoupling and severing global supply chains, and will continue to advocate removing trade barriers, integrating and enhancing supply chains.

China will remain a major engine for the world economy, and will continue to offer important opportunities for the global growth.

This content is sponsored by the Embassy of China