Ambassador Tian Xuejun
China is now the world’s second largest economy, but there have been a number of media reports about it slowing down. How do you see the current economic landscape of China?
China’s economic growth rate has indeed slowed down, compared with the double-digit growth in the past. This is in line with objective law.
As the total volume of China’s economy accumulates, the base effect would inevitably lead to a smaller growth rate figure. But this slowdown does not entail a deterioration in the economy of the country.
A longitudinal analysis indicates that China’s growth rate is still within a reasonable range; and a crosswise comparison shows that China still enjoys one of the highest growth rates in the world.
The slowdown of China’s economic growth is closely linked to the worsening external economic environment.
Since the outbreak of the international financial crisis, world economic recovery has remained sluggish, the total global demand has been deficient and China’s foreign trade has been hit hard.
At the same time, the unconventional easing of monetary policy by certain developed countries posed difficulties to China’s macro economic control.
The slowdown of the economy is also the result of a host of macro economic actions that China has taken to accelerate the change of pattern of economic growth.
China now pays more attention to improving the quality of economic growth and to ensuring a sustainable and sound development of the economy.
The Chinese government took the initiative to lower the economic forecast to 7.5% during the meeting of the National People’s Congress (China’s parliament) last March, as a way to change the pattern of economic growth from one that focuses on expansion to one that pays more attention to quality.
Major indicators of China’s economy are good at present. For the first half of 2013, the growth rate reached 7.6%, foreign trade increased by 8.6% and CPI increased by 2.4% from the same period last year. More than 7-million new urban jobs were created and the registered unemployment rate stood at 4.1%.
In addition, the restructuring of China’s economy has achieved significant results, with the development of the service industry having accelerated, the industrial structure being further adjusted, the amount of energy consumed per unit of economic output lowering by a large margin, and the surplus of China’s current account remaining below 3% of GDP.
It is estimated that for the second half of this year, China’s economy will maintain a stable growth.
We are confident to reach the macro economic goals of a growth rate of 7.5% for 2013, an inflation rate of 3.5% and a registered unemployment rate of around 4.1%. Therefore, it’s fair to say that China’s economic growth is enjoying a relatively good momentum.
As for China’s future development, the 3rd plenary session of the 18th National Congress of the Communist Party of China, to be held in November, will pay special attention to major issues such as how to deepen the reform in a comprehensive way.
This will further unleash productivity, provide fresh vitality to China’s economic development and inject new impetus into the global economy.
China’s economy is now in a key transitional period and it’s normal to experience a temporary and moderate slowdown.
One will miss this historic opportunity of achieving a win-win outcome with China if one follows the wrong understanding and judgment of China’s economy that paints only the gloomy picture.
In a globalised world, the economies and financial landscapes of different countries are closely intertwined and the spill-over effects of policy measures are more prominent.
As there are still huge challenges facing world economic development and financial stability, the countries should work together.
We are all passengers in the same boat. While we work to address domestic issues, we should enhance policy coordination and international cooperation to facilitate a strong, balanced and sustainable world economic development.
The new leadership has pledged to upgrade the country’s model of economic growth. What will be the follow-up actions?
Premier Li Keqiang proposed to upgrade China’s economic development model during his first press conference after taking office in March this year.
This is a strategic objective of the new Chinese government, attracting attention both from home and abroad.
I think the following three aspects will be the focus of the next phase: First, China will strike a better balance between the pace and quality of economic development.
This means that on the one hand, we need to ensure the sustained development of the economy, prevent inflation and get all the potential risks under control, while on the other hand, we need to make progress while ensuring stability, focus on improving the quality of economic growth while maintaining the quantity.
Second, China will drive the economic growth more by innovation, domestic demand and reform.
The key to this upgrade is to promote the change of pattern of economic growth, which requires that we combine the benefits of reform, the potentials of domestic demand and the vitality of innovation, and make this synergy the new driving force.
To this end, China will further promote the strategy of building an innovation-driven economy, and give greater play to the role of science and technology in economic growth to make China more innovative.
Third, China will work to improve people’s livelihood and promote social equity.
To improve people’s livelihood means to enable people to enjoy clean air, safe drinking water and food, and to provide them with a safety net that covers all their basic requirements for life, including education, health care, old age pension and housing.
To promote social equity means to establish a better system which offers opportunities to everyone and every enterprise for fair competition and development, so as to facilitate private investment and encourage business starters, create more jobs, improve business competitiveness and boost economic vitality.
An upgraded model of China’s economy means greater innovation capacity, a better economic structure and a fairer and more effective market system. It will bring higher salaries, more employment, a cleaner environment and better livelihood. Such an upgrade is the only road that leads to the future development of the country.
Some observers feel that China’s economic slowdown will have a negative impact on South Africa and Africa’s economic development. What is your point of view?
China is now the world’s largest developing country and its second largest economy. It cannot achieve stability and development without the support and assistance from the rest of the world likewise.
The prosperity and development of the world also need China’s engagement and contribution. I think China’s development brings real opportunities and benefits to the world, rather than risks.
Since the outbreak the international financial crisis, China has contributed nearly 1/4 of world economic growth every year, which is a great help for the world to realise an economic recovery.
Its good while inexpensive commodities have greatly enriched the life of people of different countries. Its foreign investment has created many local jobs.
And the large number of Chinese tourists travelling overseas have been warmly welcomed by local businesses.
Take Africa as an example, China has become Africa’s largest trading partner country and an important importer of goods from Africa.
Its rising domestic consumption bodes well for the continent as it could sustain a strong demand for African exports. Africa, on the other hand, stands to benefit significantly from the increased trade relations with China as a gateway to other Asian markets.
As Mme Asha-Rose Migiro, the former Deputy Secretary-General of the United Nations and the former Foreign Minister of the United Republic of Tanzania said, China’s growth and the ever closer China-Africa relationship offers unprecedented opportunities for both sides.
More than one South African friend told me that against the backdrop of the weak US and EU demands, South Africa’s economy would otherwise be hit hard if China-SA business cooperation had not been developing at this fast pace over the previous years.
It is estimated that by 2020, the purchasing power of the Chinese market will reach RMB64 trillion yuan (around US$10 trillion).
China will import US$10 trillion worth of goods and invest an additional US$500 billion in the coming five years, with more than 400 million people travelling overseas.
According to the latest global economic forecast by the IMF issued in July this year, the global growth rate of 2013 will stand at 3.1%.
If China registers a growth rate of 7.5%, it will then contribute 27.76% of world economic growth.
There is no doubt that China has injected vigor and vitality into the global economy and will continue to do so in the future, presenting huge opportunities of economic development to countries around the world.
The Chinese government and people are now working to achieve the Chinese Dream, a dream for the prosperity of the country, the rejuvenation of the nation and the happiness of the people.
To be more specific, the Chinese Dream is that, by 2020, the centenary of the CPC, China will double its 2010 GDP and per capita income for both urban and rural residents and complete the building of a moderately prosperous society in all respects; and by 2049, the centenary of the New China, we will build a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious.
After achieving the two “Centenary Goals”, we will work to eventually realise the great rejuvenation of the Chinese nation. These are the three major phases of the Chinese Dream.
In the process of realising the Chinese Dream, China wishes to join hands with people from all other countries to advance the principles of equality, mutual trust, inclusiveness, mutual learning and win-win cooperation, remain committed to building a new type of global partnership for development featuring equality and mutual-benefit.
This is to lay a solid foundation for the long-time stable development of the global economy and strive to achieve peace, stability, prosperity and development of the world.
Contents and photographs for this page were signed off by the Chinese embassy
