China's Development, Still Tremendous Opportunity for the Region
2023-10-01 17:02

It is not news to read some western media repeatedly hyping up "overcapacity", "debt crisis" or "struggling for momentum" of the Chinese economy. But recently, some coverage and articles got so obsessed with "shorting" China that they went as far as proclaiming "a slowing Chinese economy impacting the rest of Asia". Theories predicting the collapse of the Chinese economy have kept occurring every now and then, only to be proven baseless, self-defeating and bankrupt.

I returned earlier this month to China for work report where I visited a number of places. What I saw is an ostensibly recovering economy with bustling streets and crowds out there to spend. Be reminded, that was not yet the typical holiday season in China. Let me share some of my perspectives on the current economic situation in my country.

The macro-economy is gaining momentum. Amid the struggling world economy and a challenging and complex external environment in the beginning of this year, the Chinese economy kicked start with a robust recovery. In the first half of this year, China's GDP grew by 5.5% year-on-year, notably faster than last year's 3%, outpacing the American 1.7%, the European 1.1% and the Japanese -0.4%. The World Bank, the OECD and the IMF have respectively projected China's economy to grow at 5.6%, 5.4% and 5.2% for 2023, contributing one third of the global growth. China's GDP was 18 trillion USD in 2022, which means a 5.5% growth is a net increase of nearly 1 trillion USD, more than twice the size of the Philippine GDP. The Chinese economy will remain an important engine for the global economy.

The development is high-standard, and showing great resilience. In China, a considerable part of the commodity retailing is done online. And I was welcomed by my family with the electric vehicle recently bought. We are seeing in the first half of the year, new industries and new forms of business generating growth in China. Live commerce is transforming online retail, the sales of which reached 7.16 trillion RMB, roughly 1 trillion USD, an increase of 13.1% over the same period last year. The export of new energy vehicles amounted to 795,000 units, up by 112.7% year-on-year, letting China to stand as the world's largest automobile exporter. Despite the all-round sanctions, bans and suppression by the US and its allies, Huawei released its new model of cellphone Mate 60 in September. With over 10,000 localized components, the gadget marks a remarkable progress in independent innovation.

High-level opening-up is steadily advancing. In the first half of the year, China's foreign trade flourished, with external trade in goods exceeding a record 20 trillion RMB, up by 2.1%. Trade in goods with countries along the Belt and Road jumped 9.8 % year-on-year. France, Britain, Japan and Germany boosted investment in China in the first half of 2023 by 173.3%, 135.3%, 53% and 14.2% respectively. Last week, the American Chamber of Commerce in Shanghai released its 2023 China Business Report, showing 52% of respondent American companies expect greater revenue in 2023 than the previous year, while 31% of respondents are increasing investment in China or 6 percentage points more than last year. In mid-September, Starbucks inaugurated a new coffee innovation park in China's Jiangsu Province with an investment value of about 220 million USD. Its chain expands rapidly in China by opening one new store nearly every nine hours. "China presents tremendous opportunities for Starbucks," said Laxman Narasimhan, CEO of the coffee company. While cross-border investment is lackluster in other parts of the world, international investors have again chosen China the market of which is not optional, but a must for global businesses.

The consumer market has continued to expand. With the rebound in offline businesses, total consumption in the first half of 2023 contributed 77.2 % of the growth. Domestic tourism this summer reached 1.84 billion person times, generating a revenue of 1.21 trillion RMB, surpassing that of 2019. Some 505 million Chinese went to the cinema, marking a new box office record of over 20 billion RMB. When I was in the medium-sized city of Changshu, Jiangsu Province for holiday, the hotel was fully booked and tourist spots packed. On September 23, the opening ceremony of the 19th Asian Games was held in Hangzhou, Zhejiang Province, setting off a new wave of sports and tourism consumption. This weekend, China will embrace the eight-day holiday of the Mid-Autumn Festival and the National Day, with hotel bookings in popular cities up by five times from the same period in 2019 and orders for outbound travel up by nearly 20 times from that in 2022.

The above facts showcase the resilience, potential, vitality and the fundamentals sustaining China's economic growth in the long run. We are confident and capable of promoting the sustained and sound development of the economy despite all risks and challenges. China is an economy with a population of more than 1.4 billion, a per capita GDP of over 12,000 USD, and a 400 million strong middle-income community. Our economy is underpinned by strong and robust industrial and consumer demand. China has been the source of more than 30% of global growth over the past decade, serving as a major locomotive for the world economy. A sustained uptick in China's economy will give a strong impetus to the global recovery from the pandemic and naturally will first benefit the Asian neighbors, the Philippines included.

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