China’s economic prospects: Can we really be optimistic?

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By CGTN’s Dialogue

China’s economy grew by 6.9 percent in the first quarter of 2017, and consumer prices and producer prices rose by a steady 1.5 and 5.5 percent year-on-year. So statistically the world’s second-largest economy is doing well. But does China’s real economic performance deserve this reputation?

Behind the data there is still a massive income disparity, Liu Baocheng, professor at the University of International Business and Economic, told CGTN’s Dialogue.

Compared to Beijing's average GDP per capita of 10,000 US dollars, the average monthly income for a blue-collar worker is just 600 US dollars. “We are really surrounded, as Beijing citizens, by those still very poor people who live in a basement,” noted Liu.

Another feature of the Chinese economy currently is the plethora of new entrepreneurs. In the past three years, the number of market entities in China increased by a daily average of 40,000. But according to Liu, “most of those entrepreneurs live on three Fs: fools, friends, and families”.

Most enterprises, especially those started by college graduates, are merely “additional tuition” to add to their life experience, he argued.

For Andy Mok, founder and managing director of Red Pagoda Resources, more reforms will be needed in the financial sector.

“Systemic financial risk is real. Hopefully, we see things like the Chinese-Hong Kong bond connect, and other financial reforms that bring more financial transparency and discipline to the financial sector in China,” he urged.

Mok was nevertheless "guardedly optimistic" about China’s future economic performance. “The government knows how to fly this airplane,” he argued.

Dialogue with Yang Rui is a 30-minute current affairs talk show on CGTN. It airs daily at 7.30 p.m. BJT (1130GMT), with rebroadcasts at 3.30 a.m. (1930GMT) and 11.30 a.m. (0330GMT).