Economy changes gear
Editorial  ·  2023-07-21  ·   Source: NO.30 JULY 27, 2023

China registered a GDP growth rate of 5.5 percent in the first half of this year, the highest among the world's major economies, according to data released so far. Given the complexities in both the domestic and international environments, it is essential to have a nuanced understanding of China's economic conditions.

Growth of 5.5 percent may seem modest for China, a country that has long been known for rapid growth. However, it is higher than last year's 3 percent and the first quarter's 4.5 percent. Moreover, it was achieved against the backdrop of a weak world economy and sluggish growth among other major economies.

Global inflation has remained high this year, and tightening monetary policies among major developed economies have created a serious spillover effect, leading to a slower global recovery. In this context, China has focused on improving its economic structure. New growth drivers are emerging, particularly in the fields of science and technology innovation and artificial intelligence. For instance, outputs and exports of lithium-ion batteries, solar cells and electric vehicles are increasing significantly. These are signs that the Chinese economy continues to accumulate new strengths, indicating that the target of around 5-percent GDP growth for the whole year will be accomplished.

China is also improving its trade mix and strengthening mutually beneficial trade exchange with other countries. China's high-level opening up has hedged some of the spillover caused by other major economies' tightening monetary policies, and played an important role in driving world economic development.

Major international institutions have recently raised their forecasts for global growth, a prime reason for which is the recovering Chinese economy. According to the International Monetary Fund, China will contribute about one third of global growth this year, twice as much as the United States.

With its remarkable resilience, potential and vitality, the fundamentals of the Chinese economy remain sound. In the long run, all the conditions supporting its continued growth will persist. China is the world's largest developing country, and its pursuit of a better life for its over 1.4 billion people serves as the biggest powerhouse for its economy and one of the strongest contributors to global growth.

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