On March 1, Spokesperson & Deputy Consul General of China in New York QIAN Jin introduced the situation and official principles and standpoints of China on China's economic development and the related topics to Reuters, Wall Street Journal, South China Morning Post, Forbes, World Journal, Sing Tao Daily, The China Press, Sino Vision, Chinese Radio Network, Phoenix TV, Xinhua News Agency, CGTN, China Daily, China News Service.
QIAN Jin: Recently, some concerns and doubts about the prospect of China's economic development are among public opinion, and even repeatedly hyping up the "struggling for momentum", “lack of drive” and "dragging down the world" of China's economy. This is further from the truth. Generally speaking, under the strong leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core, with external pressure withstood and internal difficulties overcome in 2023, China’s economy witnessed momentum of recovery, the high-quality development was advanced steadily, the major expected targets were well achieved, and solid strides were taken in building China into a modern socialist country in all respects. I would like to further elaborate on this:
●How to view China's economic development
Keyword 1: Steady
Steady is a defining feature of China’s economic development.
QIAN Jin: Against the backdrop of global turbulence and change and lackluster economic growth, China's economy has shown steady progress. The ship of China’s economy is breaking turbulent waves of the global economy and moving steadily forward. The gross domestic product (GDP) exceeded 126 trillion yuan ($17.52 trillion) in 2023, an increase of 5.2% over the previous year, higher than the around 5 percent target set at the beginning of the year. The report of the International Financial Forum demonstrates that China contributes 32% to the global economic growth in 2023 and is the largest engine of the world economy. Premier Li Qiang attended the World Economic Forum Annual Meeting 2024 at the Davos Congress Center and said, China did not resort to massive stimulus. China did not seek short-term growth while accumulating long-term risks. Rather, China focused on strengthening the internal drivers. As the second largest economy in the world, China has established, after years of development, sound and solid fundamentals. The Chinese economy can handle ups and downs in its performance. No matter how the international landscape changes, the overall trend of long-term growth will not change.
Last year, domestic demand contributed 111.4% to the nation's economic growth in 2023, of which final consumption contributed 82.5%, propelling economic growth by 4.3 percentage points. The actual utilization of foreign capital marking the third-highest in history. The construction of a unified national market was accelerated, and the business environment was further optimized. Newly created jobs were expected to exceed 12 million in urban areas in 2023, and resident incomes continued to increase. The total grain output reached 695 million metric tons in 2023, setting another record high and remaining above 650 million metric tons for nine consecutive years. Energy supply remained stable, and the foundation for secure development was further consolidated.
In the mean time, China is the only country with industries across all categories in the U.N. industrial classification. The added value of China's manufacturing industry accounts for around 30 percent of the global total, ranking first in the world for 14 consecutive years. China is also home to over 200 mature industry clusters. With its large scale, complete categories and strong supporting capacity, China's industrial system can meet the demand of the rapid development of social productivity and will contribute to better global allocation of production factors and the rise in global productivity.
The Spring Festival boom propels concerted consumption in China and offers the world a window on China's economic vibrancy, which has boosted market expectations and confidence and augurs well for 2024. During the Spring Festival holiday, China's domestic tourism spending hit 632.6 billion RMB, up by 7.7 percent from the same holiday period in 2019. China's box office revenue during the festival totaled 8 billion RMB, marking a new record high. During the New Year holiday, 135 million domestic trips were made, up by 9.4 percent on a comparable basis from the same period in 2019; and domestic tourism generated 79.73 billion RMB of revenue, up by 5.6 percent compared with the same period in 2019.
Keyword 2: High-Quality
High-Quality is a defining theme of China’s economic development.
QIAN Jin: China is now advancing Chinese modernization on all fronts through high-quality development. Delivering modernization to more than 1.4 billion people will be a remarkable achievement in human history, one that will provide continuous impetus to the development of China and the wider world.
Last year signifies the constant optimization of structures and the continuous enhancement of development quality and substance. For example, in foreign trade, the import and export share of private enterprises increased by 3.1 percentage points, reaching 53.5%, firmly establishing their significant role. The structure of foreign trade has also continuously been optimized, with two notable breakthroughs. First, China's exports of "new three" products — new energy vehicles, photovoltaic products, and lithium-ion batteries — surpassed 1 trillion yuan for the first time, with a growth of nearly 30%. This indicates a continuous improvement in the structure of our export commodities. Second, the number of business entities engaged in real import and export activities topped 600,000 for the first time, reaching 645,000. This demonstrates the continuous growth and optimization of foreign trade entities. It is generally accepted in the global business community that “the next China is still China.”
In terms of foreign investment, the structure has continuously been optimized, with the proportion of high-tech industries reaching 37.4%, up 1.3 percentage points from 2022, reaching a historical high. The proportion of foreign investment in the manufacturing sector has increased by 1.6 percentage points to 27.9%. Last year, China actually utilized foreign investment of $163.25 billion, equivalent to 11.3 trillion yuan. Although this was a year-on-year decline, the scale was only surpassed by two exceptional years, 2021 and 2022, ranking as the third highest in history.
Keyword 3: Innovation
Innovation is the first driving force of China’s economic development.
QIAN Jin: China knows it too well that Innovation is essential to a country’s development. As an ancient Chinese adage advises, “If one can make things better for one day, he should make them better every day.” China's total input in research and development and investment in the high-tech sector have been growing at double-digit rates for several years running. New technologies, including cloud computing, big data, artificial intelligence and blockchain, are being applied at a faster pace. New products and new business forms such as intelligent terminals, robots and telehealth keep emerging. China now has some 400,000 high-tech enterprises and ranks second globally in the number of unicorn companies. China's foreign trade landscape is undergoing a green transformation as traditional export categories make way for high-tech innovations in the new energy sector, typified by “the New Three”, namely electric vehicles, lithium batteries and solar cells. All this will boost the formation and cultivation of new growth drivers in China.
Last year, China’s substantial innovations continued to emerge, and the transformation from old to new growth drivers accelerated. The value added of equipment manufacturing increased 6.8% year on year. The investments in high-tech manufacturing and high-tech services grew 9.9% and 11.4%, respectively. The number of granted invention patents reached 921,000. Notable progress has been made since the launch of China’s 14th Five-Year Plan. The number of new types of R&D institutions has surpassed 2,400. China has maintained its second position in terms of the number of most cited papers. Enterprises' spending on R&D has accounted for over 70% of total R&D spending. According to a 2023 report by the World Intellectual Property Organization, China ranked 12th in the Global Innovation Index and is home to the world's largest number of the top 100 science and technology innovation clusters.
Keyword 4: Opening
Opening is a fundamental logic of China’s economic development.
QIAN Jin: China remains firmly committed to opening up. We will continue to create favorable conditions for the world to share in China's opportunities. China is pursuing development at home while embracing the world. In the past four decades and more, China has achieved development and shared benefits with the world through opening up. Right now, China is a major trading partner of over 140 countries and regions. Our overall tariff level has been cut to 7.3 percent, relatively on par with the developed members in WTO.
The Chinese people believe that to establish ourselves, we should help others establish themselves because the world is a global community of shared future. Over the years, multinational corporations have cultivated the Chinese market and, based on China's manufacturing prowess, expanded their global production, grown fast and had good reward. In the past five years, the return on foreign direct investment in China stands at around nine percent, which is quite competitive globally. We embrace investments from businesses of all countries with open arms, and will work tirelessly to foster a market-oriented, law-based and world-class business environment. The report on China's business environment for foreign-invested companies in the fourth quarter of 2023 shows that over 90 percent of foreign-invested companies surveyed rated China's business environment as “satisfied” or above and over 90 percent of them think that the Chinese market is attractive. Among those surveyed, about 93 percent expect the profit of their investment in China to remain at the current level or increase in the next five years, up by 5.8 percentage points from the previous survey. We also noted that a recent report released by the American Chamber of Commerce shows that half of US companies surveyed see China as the top or among the top three global destination for investment, up by 5 percentage points compared with 2022. All these show that foreign-invested companies in China are upbeat about the future performance of the Chinese economy and confident in China's market. No matter how the world changes, China will stay committed to the fundamental national policy of opening up and open its door still wider to the world. The world economy is like a big ocean that cannot be cut into isolated lakes. The trend toward economic globalization cannot be reversed. A China that stays committed to opening-up will make a greater contribution to the progress of human civilization.
Keyword 5: Certainty
The good seaman is known in bad weather. In a world battling economic uncertainties, China will continue to be a source of certainty.
QIAN Jin: China's steady growth in the long run have not changed and the world has shown confidence in China's economy this year. IMF Senior Resident Representative in China predicted that the Chinese economy will maintain sound growth in 2024 and continue to account for one third of global economic growth. The Economist Intelligence Unit predicted that the fundamentals of China's economy in 2024 will be further cemented. In China, there are now over 400 million people in the middle-income bracket, and the number is expected to double in the next decade or so, which will play an important role in boosting aggregate global demand.
In 2024, China will apply the new development philosophy on all fronts, speed up building the new development paradigm, promote high-quality development and continue to harness its strong innovation capacity, huge market, sound infrastructure, complete industrial chain and rich and high-quality human resources. China will expand high-level opening up, further ease market access, foster a world-class, market-oriented business environment governed by a sound legal framework, and share with the rest of the world new opportunities created by Chinese modernization. China’s certainty comes from the fact that regardless of any risks or challenges that it faces, China’s economy will continue to remain on a positive trajectory over the long run and act as an important engine of growth in the global economy.
●How to view China-U.S. Economic and Trade Relations
Keyword 1: Cooperation for Mutual Benefit
QIAN Jin: China-U.S. economic and trade relations are mutually beneficial in nature. In face of common challenges, united we stand, divided we fall.
During the two presidents’ summit in San Francisco, President Xi stressed that the two sides should assume a new vision and build together five pillars for China-U.S. relations, including jointly advancing mutually beneficial cooperation. China and the United States have broad common interests in a wide range of areas, including traditional areas such as the economy, trade and agriculture, as well as emerging areas such as climate change and artificial intelligence (AI). Under current circumstances, the common interests between China and the United States have increased, not decreased.
Recently, President Xi congratulated the U.S.-China Business Council (USCBC) Board of Directors and all its members on the 50th anniversary of the Council and said, as an important part of China-U.S. relations, business cooperation between the two countries has brought many tangible benefits to the two peoples. Chinese modernization will provide more opportunities for businesses from the U.S. and all other countries. There is huge potential, vast space, and a promising future for greater economic and trade cooperation between the two countries. This year marks the 45th anniversary of the establishment of diplomatic relations between China and the U.S. Looking back, bilateral trade has grown by more than 200 times during the past 45 years, with two-way investment stock exceeding $260 billion. According to statistics, the average return on US direct investment in China was 14.7% between 2000 and 2020, far higher than that of US outbound direct investment of 9.7%. Over 70,000 American companies are doing business in China, nearly 90% are earning profits. Exports to China have supported more than 1 million jobs in the US. China and the U.S., being the world's largest developing and developed countries, respectively, are each other's important trade partners, with two-way trade and investments surging and the industrial and supply chains closely integrated. China-U.S. economic and trade collaboration has expanded from a singular focus to various sectors of the economy, contributing substantially to the economic and social development of both countries as well as the well-being of the two peoples. Decoupling between us will not work, and will produce no winner. Both our peoples want cooperation, and our cooperation is driven by win-win outcomes.
Keyword 2: Long and Arduous Task
QIAN Jin: Some people have been hyping up so-called “China threat”, advocating cutting China off from chips, slapping new sanctions. All these stand in stark contrast to the statements by the U.S. side that it is ready to keep growing economic and trade relations with China and does not seek to contain or suppress China’s development, and run counter to the common understandings reached between the two Presidents.
The stabilizing momentum in China-U.S. relations should not be disrupted by domestic politics. To achieve that, the Golden Rule and the Silver Rule should be applied. The US side desires “a level playing field” for all companies, so does China. And for Chinese companies in the US, unreasonable tariffs, sanctions and suppression are most unwanted. In such spirit, China hopes that the US can create a fair, just and non-discriminatory business environment for Chinese enterprises to invest in the US, view Chinese enterprises' investment behavior objectively and rationally, avoid political factors interfering with economic cooperation, ensure the openness, fairness and transparency of investment security review, provide more opportunities for Chinese enterprises and enhance their confidence in investing in the US.
Following through on the important common understandings reached between the presidents of the two countries, the China-U.S. financial working group and economic working group respectively held three meetings and had in-depth, pragmatic, candid and constructive communication on various issues, and agreed to maintain communication. China's Minister of Commerce Wang Wentao on Monday met with U.S. Trade Representative Katherine Tai on the sidelines of the WTO's 13th Ministerial Conference in UAE. The head of US Chamber of Commerce is visiting China this week.
Many people believe that all these show a positive sign of the improvement of China-US relations. As a Chinese poem goes, only by passing together through “endless mountains and rivers”, could we encounter “the shade of a willow, bright flowers and a lovely village.” China is willing to faithfully implement the San Francisco vision reached by the two presidents with the U.S. The two countries should maintain regular communication, properly manage differences, strengthen mutual understanding and trust, promote practical cooperation, and strive to create a favorable environment for economic and trade cooperation.
