China’s economy resilient amid challenges

The year 2021 saw almost all economies at a crossroads amid headwinds from COVID-19 to energy shortages and inflation.

Yet China — the only major economy to grow last year — again demonstrated the power of resilience.

Despite multiple challenges, China’s economy has seen a largely steady recovery this year and is set to achieve major annual targets, Chinese Premier Li Keqiang said while presiding over a recent symposium on the economy.

Recent economic data backs the premier’s remarks. From foreign trade and industrial strength to vibrant consumption and inbound investment, the Chinese economy provides abundant evidence of its tenacity.

China’s imports and exports of goods expanded to 31.67 trillion yuan (US$4.95 trillion) in the first 10 months of 2021, 130 billion yuan higher than the pre-pandemic goods trade level for the whole year of 2019, official data showed.

“Global exports are mainly supported by prices. However, volumes have made a greater contribution to China’s exports than prices in 2021, suggesting China’s exports are indeed resilient,” said a report by China International Capital Corporation Limited.

Bai Ming, a researcher with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, attributed the stable foreign trade to strong external demand as China’s complete industrial system continued to play a key role in stabilizing the global industrial chain.

Industrial activities are holding up well against rising producer prices, sporadic resurgence of the epidemic and energy strain, as the government’s epidemic control proved effective and efforts at ensuring stable prices and energy supply paid off.

In October, China’s industrial production beat market expectations by reporting a 3.5 percent year-on-year rise, up 0.4 percentage points from September.

China’s vibrant consumption and its lure for foreign investors also stood out, as the country’s October retail sales rose above forecasts and foreign direct investment in 2021 is expected to post double-digit growth.

While worries run high over spillover effects of major developed economies’ monetary policy adjustment on emerging markets, China’s central bank said the adjustment will have “limited” impact on the country.

This resilience could be attributed to China’s huge economic size, normal monetary policies, progress in market-oriented reform of the exchange rates of the Chinese currency as well as increasing attractiveness of yuan-denominated assets, the People’s Bank of China said in its latest quarterly report on monetary policy implementation.

A key to sustaining China’s economic vitality is the government’s determined focus on reforms needed for long-term development, while sound economic fundamentals in return give China leeway to pursue more sustainable growth.

After accomplishing its “first centenary goal” of building a moderately prosperous society in all respects, China’s leadership has put common prosperity in a more prominent position, aiming at affluence shared by everyone, both in material and cultural terms.