China's economy: Far from peaking

Editor's note: Liu Chunsheng, a special commentator on current affairs for CGTN, is an associate professor at the Beijing-based Central University of Finance and Economics. The article reflects the author's opinion and not necessarily the views of CGTN.

The Communiqué on the Fifth National Economic Census, recently released by the National Bureau of Statistics of China and the Office of the Leading Group of the State Council for the Fifth National Economic Census, demonstrates remarkable high-quality economic development in the past five years.

At the enterprise level, the scale of enterprise assets has continuously expanded. By the end of 2023, the assets of numerous enterprises had increased significantly compared with previous years, providing a solid foundation for their further development.

Operating revenues have also maintained relatively rapid growth, indicating enhancement of the market competitiveness and profitability of enterprises.

The capacity for scientific and technological innovation has also improved. Representative enterprises such as Huawei and BYD have increased their investment in research and development in fields like 5G communication and new energy vehicles respectively, achieving numerous breakthroughs in core technologies and innovative results and promoting the development of the industries.

Labor productivity has also improved, meaning that enterprises can utilize resources more effectively in their production and operation, reduce costs, and improve the quality and quantity of products and services.

In terms of industrial structure, there is an evident trend of optimization and upgrading. The number of units in the secondary and tertiary industries has increased substantially. By the end of 2023, compared with the end of 2018, the number of legal entities engaged in the secondary and tertiary industries across the country had increased by 52.7 percent, and the number of employees in the sector had increased by 11.9 percent. 

The digital economy has grown and expanded, becoming a new engine for economic growth.

Adjustment of the industrial structure has led to changes in the employment structure. With the development of the secondary and tertiary industries, the labor force has gradually shifted from traditional agriculture and some low-end manufacturing industries to high-end manufacturing, modern service industries and other fields.

For example, a large number of professionals with advanced technologies and knowledge have entered intelligent manufacturing, promoting rapid development of related industries. The service industries such as e-commerce and logistics have created a large number of new job positions, such as couriers, e-commerce operators, and live streamers, absorbing a large number of the labor forces.

The development of the digital industry has given impetus to economic growth in several ways. It has promoted the integration and innovation of industries. For example, in-depth integration of the manufacturing industry and the Internet has given birth to new models such as intelligent manufacturing and the industrial Internet, improving production efficiency and product quality.

It has also created new consumer demands. The development of digital industries such as e-commerce platforms, online entertainment, and digital education has changed people's consumption patterns and habits and stimulated new consumption potential.

In addition, it has improved the efficiency of resource allocation. Through technologies such as big data and cloud computing, it is now possible to analyze market demands and resource distribution more accurately, achieve optimal allocation of resources and reduce the operating costs of enterprises.

Some foreign governments, media and think tanks regard China's economy with prejudice, claiming it has reached its peak. However, even when at the bottom of economic cycle, China achieved a higher economic growth rate than those of most major economies in the world.

China transforming its economy for high-quality development, which is a long and arduous process. In terms of investment, the investment in high-tech manufacturing and high-tech services has been higher than the growth rate of total fixed asset investment, indicating that China is increasing its investment in emerging industries and cultivating new economic growth points.

In fact, the World Bank has revised up its forecast for China's economy in its latest December report, predicting GDP growth of 4.9 percent in 2024 and 4.5 percent in 2025, up 0.1 and 0.4 percentage point respectively from the June forecast. The World Bank's upward revision is further proof that far from peaking, China is in the process of economic recovery, and this trend is likely to continue.

Since September, the Chinese government has implemented a series of monetary and fiscal policies to stimulate economic growth. China's exports have maintained a strong growth momentum, benefiting from factors such as cyclical rebound in external demand, declining export prices, and changes in real exchange rates.

Although the real estate market still faces some challenges, policy support and gradual recovery on the demand side have led to signs of market improvement. Policy support for the industry is expected to modestly boost housing demand and help to reduce inventory. The industry is expected to improve by the end of 2025.

Some media in Western countries have been claiming for years that "China's economy has peaked" while in reality it has kept growing steadily. Bashing China's economy won't solve their own domestic problems. It's through strengthening cooperation with China, not confrontation, that a mutually beneficial outcome can be achieved.

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