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22 Thursday March 16 2017
Latest Christchurch news at www. .kiwi
The Star
Retrospective Highlights
of China’s Economy in 2016
Despite challenges including anemic world growth and volatile global
financial markets, China achieved steady growth of its economy and
pressed ahead with key reforms in 2016. We will use several key
phrases to review the economic year.
ECONOMY STABILIZING
The reform has steadily progressed since policymakers proposed it at
the end of 2015. China has been committed to foster new drivers of
growth, develop an advanced manufacturing sector and upgrade the
real economy. A large number of zombie enterprises were shut down.
Industries plagued by overcapacity and lagging technology must now
move up the value chain to stay competitive.
China will continue to improve its basic economic system and
expedite reforms to delegate power, improve regulation and optimize
services. China’s Central Economic Work Conference has made
“seeking progress while maintaining stability” the main theme of
economic work in 2017, pledging to further push for substantial
progress in supply-side structural reform.
CAPACITY-CUTTING
POVERTY ALLEVIATION
China pursues the goal of common prosperity. It has taken major steps
to alleviate poverty and lifted over 700 million people out of poverty.
China's 13th Five-Year Plan for Economic and Social Development
has codified the central leadership's poverty-reduction decision into
the state will that is operable in practice. For the first time, the heads
of Party committees and governments of relevant provinces and
autonomous regions have signed to the Central Authorities letters of
commitment on poverty elimination, and likewise similar documents
have been signed by leaders at lower levels.
It is one of the basic policies of the Chinese government to innovatively
improve its methods in reducing and eradicating poverty, and takes
targeted measures to that end. Recently, through data tracking on
the conditions of the impoverished population, the government
analyzes the causes of their problems, and offer guidance on their
development needs. Targeted measures are implemented in terms
of funding, projects, and recipients. Every impoverished household
is guaranteed help, every village has designated officials to carry out
poverty eradication measures, and goals are met within the defined
standards. In the fight against poverty, China has enhanced poverty
eradication effects, accelerated the speed of poverty eradication, and
ensured impoverished people's right to life.
China’s overall economic performance remained stable in 2016.
Despite the rocky start and remaining downward pressure, China’s
economy ended the year on a firm footing. Gross domestic product
totaled 74.41 trillion yuan (about 10.83 trillion U.S. dollars). And the
annual growth rate reached 6.7%, within the government’s target of
between 6.5% and 7%, scotching rumors of a hard landing. The figure
represents a medium-high level of growth and China’s economy
continued to run within a reasonable range, with its structure further
optimized and development model transformed, indicating a good
start for the country's goal of achieving at least 6.5% annual growth
during the 13th Five-year Plan period from 2016 to 2020.
China's economy has entered a new phase known as the “new normal”
as the country tries to modify its export and investment driven growth
model into one that draws strength from consumption, innovation
and the service sector. In 2016, the service sector accounted for 51.6%
of total GDP, consumption contributed 64.6% to GDP growth, and
high-tech industries posted fast expansion.
Moreover, China’s economy still remains the top one engine for the
growth of world economy. China’s increasing domestic demands
have contributed significantly to world trade and economic growth.
The outbound Chinese investment also kept increasing and reached
170.11 billion USD in total in 2016, adding impetus to global economic
restructuring. The contribution of China’s economic development to
world economy has reached 33.2% in 2016 as calculated in constant
2010 USD and about 40% if calculated in 2015 USD.
In the coming five years, China is expected to import $8 trillion USD
of goods, attract $600 USD billion of foreign investment and make
$750 USD billion of outbound investment. Chinese tourists will
make 700 million overseas visits. All this will create a bigger market,
more capital, more products and more business opportunities for
other countries.
SUPPLY-SIDE STRUCTURAL REFORM
“Supply-side structural reform” is now
a catchphrase in China. Throughout the
year, the authorities pushed forward five
tasks: cutting industrial capacity, reducing
the housing inventory, lowering leverage,
cutting corporate costs and improving
weak economic links.
Looking back at the economic priorities set for 2016, industrial
overcapacity was always a key battlefield.
Steel and coal, the two most troubled sectors, were prioritized in the
battle against overcapacity. In 2016, China shed more than 65 million
and 290 million tons of inefficient steel and coal-mining capacity
respectively. The government plans to raise those numbers to 140
million and 800 million tons within the next three to five years to
restore healthier fundamentals to those industries.
Meanwhile, the government is working with business communities
on various retraining programs. In 2016 alone, 700,000 workers once
employed in downsized industries moved on to new jobs.
INNOVATION-DRIVEN
The fundamental
issue plaguing the
global economy
is the lack of
driving force for
growth. Innovation
is the primary
force guiding
development.
China is closing
the innovation gap
and trying to move
beyond just being
the world's factory.
Policy makers want the country's future growth to draw strength
from new technologies, new ideas and new business models. China
chose innovative development as one of the five key principles
for the current Five Year Plan which sets the target of building an
innovative economy by 2020. Outline of the National Strategy of
Innovation-Driven Development was released last May. Innovation
has been selected by the Chinese Presidency as a key theme for the
G20 held last September, and President Xi Jinping said at the opening
of the Business 20 summit (an integral part of the G20 Summit) that
to make China an innovative country and a leader in science and
technology is what China must do now in pursuing development.
According to a global survey by Cornell University, INSEAD, and
the World Intellectual Property Organization, China is now ranked
among the world's 25 most innovative economies.
From drones to artificial intelligence, the internet to genetic
engineering, innovative Chinese companies are leading global
innovation and reshaping the country's technology and business
landscape. We see companies like Huawei, Lenovo, Haier and also
the Internet giants Baidu, Alibaba, Tencent (BAT) relentlessly
innovating products and technologies, often disrupting traditional
industries such as BAT has done in the catering, financial services,
taxi, healthcare and other sectors.
Innovation will continue to feature prominently on China’s growth
agenda. In pursuing the strategy of innovation-driven development,
China will bolster the strategic emerging industries, apply new
technologies and foster new business models to upgrade traditional
industries; and will boost new drivers of growth and revitalize
traditional ones.
The State Council released Poverty Alleviation Plan for the 13th
Five-Year Plan Period (2016-2020) in 2016. The Central government
allocated 67 billion RMB of special fund for poverty alleviation, and
the target of lifting 10 million people out of poverty in the year has
been achieved as planned.
BELT AND ROAD INITIATIVE
China's One Belt and One Road Initiative attracted worldwide
attention and has been widely welcomed since its introduction
three years ago. Upholding the principles of co-consultation,
co-contribution and sharing, China has closely combined its
development with development of countries along the routes and
yielded good results.
In 2016, with efforts of many countries, the initiative accomplished a
series of achievements in many fields, implementing several landmark
projects. More than 100 countries and international organizations
have voiced their support or strong interest in participating in the
initiative, and China has signed cooperation deals with more than
40 of them. Chinese companies have made over $50 billion USD of
investment and launched a number of major projects in the countries
along the routes, producing huge economic and social benefits.
China stands ready to maintain close contacts with New Zealand
to promote the integration between the “Belt and Road” initiative
and the “Thirty Year New Zealand Infrastructure Plan”, and push
forward the implementation of more cooperation projects at an
early date. New Zealand, as an important stop in the 21st Century
Maritime Silk Road, can embrace important business opportunities
from participating in the “Belt and Road” initiative, and New Zealand
enterprises focused on infrastructure construction may be able to link
with international capital market more conveniently. China expects
to increase its annual trade volume with countries along the Belt and
Road to 2500 billion USD in the next ten years. The continuous input
in the trading route and infrastructure by Chinese enterprises will
bring about extensive profits for New Zealand exporters.
This advertorial page is supported by The Chinese Consulate