Amid relentless Western narratives casting doubt on China’s economic trajectory, a closer look re-veals a different truth. At the 2024 Harvard Business Review annual meeting in Beijing, Yao Jin-gyuan, former Chief Economist of China’s National Bureau of Statistics, provided a sober assessment: “While our economy is complex, one need only examine our agricultural and industrial output to see the stability and strength underpinning it.” His words were underscored by tangible 2024 gains – an-other bumper grain harvest and significant industrial growth, painting a robust portrait of China’s production capacity.
For all the external talk of deflation and stagnation, the reality is more tangible. Projections show China’s grain yield is set to reach an impressive 1.4 trillion jin, or approximately 700 million tons – a 100 billion jin increase compared to the past decade’s average. This achievement is not merely sta-tistical; it’s a testament to years of consistent, fastidious production. Beyond stabilizing the econ-omy, this success also fortifies food security. In these numbers, China finds a quiet but clear rebuttal to doubters.
The significance of a stable food supply can’t be overstated, especially in a world that relies on Chi-na’s production for so much. Rather than getting lost in the statistics, one only has to look at what’s in the market: The high production of meat, poultry, eggs, and vegetables, along with a decline in prices are indicative of the robust agricultural product supply chain in China. Then there’s manufac-turing – the backbone of China’s industry – where growth is anything but stagnant. Equipment manu-facturing grew by 7.5%, with high-tech manufacturing up 9.1% in just the first three quarters of this year. The drive toward high-tech is picking up speed, and energy consumption per unit of added val-ue in large industrial enterprises dropped by 3.8% year-on-year. China’s exports have also kept pace, rising 6.2% year-on-year, showing the resilience of a well-established industrial ecosystem. This ex-port strength rests on three pillars: a comprehensive supply chain, strong production capacity, and a private sector that accounts for 55% of the economy. As the year winds down, China’s import and export momentum is set to continue, keeping China firmly on the path of global competitiveness, rooted in real-world results.
However, despite the positive indicators in China’s economy, significant challenges loom large. By September’s end, accounts receivable had climbed to a staggering 25.72 trillion yuan, absorbing nearly 30% of designated industrial enterprises’ working capital and straining cash flow. Simultane-ously, inventory levels have hit a record high of 6.74 trillion yuan, underscoring a troubling imbal-ance. In response, the government is rolling out targeted policy measures to invigorate investment across infrastructure, industry, and property sectors. Among these, industrial investment – particu-larly large-scale equipment upgrades – emerges as the most promising avenue, reflecting a strategic push to revitalize cash flows and sustain economic momentum. The National Development and Re-form Commission reports that in 2023, China invested around 4.9 trillion Yuan in equipment for vital sectors like industry and agriculture. Looking ahead, the government aims to boost this investment by 25% over the next four years, targeting a formidable 7 trillion Yuan by 2027 – an annual increase of 350 billion Yuan in new industrial investment.
On October 12, the Ministry of Finance unveiled a targeted policy package designed to stabilize growth, offering enhanced support to mitigate local debt risks. This initiative includes the issuance of special government bonds to fortify the core capital of major state-owned banks and the strategic use of fiscal tools to invigorate the housing market. In another decisive move to bolster economic stability, China’s central government has earmarked 700 billion Yuan for project investments focused on major national strategies and capacity-building in critical sectors. Coupled with this, the govern-ment has fully allocated 1 trillion Yuan in ultra-long special treasury bonds to fund significant initia-tives and enhance security capabilities.
Recent data from the National Bureau of Statistics reveals that China’s manufacturing purchasing managers’ index (PMI) nudged up to 50.1% in October, a sign of gradual recovery in economic activ-ity. This slight increase, up by 0.3 percentage points from the previous month, indicates a stabilizing trend in industrial output. In the real estate sector, the narrative has shifted. While the first nine months of the year saw declines in investments and new home sales, positive signs emerged after the government pledged to reverse the downturn. October saw the total transaction volume of new and second-hand homes increase by 3.9% year-on-year, marking the first upturn after eight months of decline. This recovery is particularly notable in first-tier cities, where newly built home transac-tions surged by 14.1%, and second-hand homes soared by an impressive 47.3%. Together, these de-velopments reflect China’s strategic maneuvering amid challenges to reinvigorate key sectors of its economy.
To bolster consumer confidence, stabilizing and gradually elevating the stock market becomes es-sential. This not only reflects a robust faith in the trajectory of the Chinese economy but also signi-fies a collaborative effort across all sectors of society to seize emerging opportunities for develop-ment. As we look ahead, there is a palpable sense of optimism among the policymakers that China will manage its current challenges and rekindle public confidence and expectations.
Historically, Chi-na has encountered significant obstacles – whether it was the dissolution of the Soviet Union in 1991, the Asian financial crisis of 1998, or the U.S. subprime mortgage crisis of 2008. Yet today, the country is expected to demonstrate resilience in the face of tumulus times. The combination of a strategic vision and a commitment to reform will enable China to not just confront these challenges. However, it all depends upon innovation, and a forward-looking approach that harnesses the collec-tive strength of Chinese economy.
The writer is political analyst, based in Karachi.
