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Why is China’s economy so resilient

Writer: Wu Guangqiang  | Editor: Jane Chen  | From:  | Updated: 2018-08-27

Email of the writer: jw368@163.com

To the great disappointment of Mr. Trump and his aggressive aides, the Chinese economy has shown no signs of collapsing under the extreme pressure of the trade war Trump has imposed on China. Trump must be extremely disappointed because, unlike other frail nations whose economy easily shatters in the face of American sanctions, Chinese economy has insistently defied the external pressures and the hand-wringing of the nattering naysayers.

Recent data revealed a robust picture of economic growth in the first half of 2018. China’s GDP saw a 6.8 percent growth with the growth rate staying within the range of 6.7 to 6.9 percent for 12 quarters in a row. China’s foreign trade surged 7.9 percent year on year to 14.12 trillion yuan (US$2.12 trillion) despite U.S. protectionist policies.

While the downsides of the Chinese economy in the first half year were also apparent, including a relatively weak yuan and a declining stock market, it’s beyond doubt that China will sail through the storms toward a brighter future as it has in the past four decades.

China has seen much severer challenges before. In the late 1990s, during the Asian financial crisis, after many Asian countries fell down like dominos, China was widely thought to be next. An October 1998 cover story in The Economist predicted the downfall of China.

Yet when the dust settled on the virulent pan-regional contagion, the Chinese economy had barely shrunk. Real GDP growth slowed temporarily, to 7.7 percent in 1998-99, before reaccelerating to 10.3 percent in the subsequent decade.

The worst global financial crisis since the 1930s in 2008-09 thumped many developed countries, but the Chinese economy still expanded at a 9.4 percent average annual rate.

Some might say that this time would be different, as the U.S. is going all out to curb China’s growth. It’s true that China is heading against stronger headwinds, but as long as the current world order is not shattered, China’s advance will not be stopped as all the positive factors that have forged China’s success are still at work.

Here are the main advantages that empower China to withstand challenges and crises and make Chinese economy resilient enough to keep growing at a fast pace.

The first and most important is the outstanding leadership of the CPC. As the largest ruling party, the CPC is the strongest, most efficient, creative and self-disciplined political party in the world. With its unmatched capabilities in macro decision-making and micro implementation, the CPC has abundant resources to deal with any short-term or long-term challenges.

Second, China’s economic structure has been greatly updated, successfully shifting from a manufacturing-driven and export-reliant economy to service-driven and consumption-dependent economy. New consumption models are emerging like mushrooms. In 2017, Chinese tourists spent US$115 billion overseas on sightseeing and shopping while they splurged a whopping US$720 around their own country.

With all-out support from the leadership and fervent mass enthusiasm, innovation and entrepreneurship are becoming a nationwide drive. New “unicorn” enterprises are emerging day by day. Data show that by the end of February this year, there were 230 unicorns across the world, of which 62 are Chinese companies, ranking China second after the U.S.

Third, China’s saving rates are still among the world’s highest despite considerable decreases in the recent years. This will enable China to better resist the impact of external pressures and accumulate new momentum for development.

The last but not the least, Chinese people’s diligence and intelligence are an inexhaustible source of success.

Adhering to the path that we have trudged along and focusing on bettering our plans and practices, we will surely achieve our glorious goal of national rejuvenation regardless of temporary difficulties or setbacks.

(The author is an English tutor and freelance writer.)