DESPITE western hue and cry, false and fake propaganda and global media campaign of China’s economic collapse, the macro-economy of China has achieved its growth target for 2024 showing its resiliency, diversification, innovation, integration, modernization, openness, qualitative industrialization, digitalization and artificial intelligence ability and national capacity to mitigate all internal and external shocks. Thus it is a good omen for its domestic consumption as well as the global economy as the world’s second-largest economy remains a key driver, contributing more than 30% to overall global economic growth.
The latest figures of the National Bureau of Statistics, China’s economy witnessed 5% year-on-year in 2024, with its GDP reaching 134.91 trillion Yuan (US$18.77 trillion) dubbing these economic achievements as hard-won providing a solid foundation for realizing the goals outlined in China’s 14th Five-Year Plan (2021-25). Thus economic stability, sustainability, immense social development, financial integration, budgetary readjustments, export orientations and, above all, people, investment, business and environment friendly policies boosted its potential, productive channels and national journey towards greater harmony, peace and happiness.
Due to many financial stimulus, monetary & fiscal policy stimulations, structural reforms in real estate, money, commodity and housing markets, incentives to manufacturing industries, low loan interest rates and bank reserve ratios, and a substantial fiscal package of 10 trillion Yuan to address local government debt issues, state guarantees to global investors and introduction of three new economic driving forces mainly EVs/NEs, lithium batteries and green technologies its national economy registered a significant acceleration in the fourth quarter of 2024, growing by 5.4% year-on-year, an increase from the 4.6% in the previous quarter.
Thus serious, coordinated and integrated economic policies and packages accelerated domestic demand, fostered consumption growth, encouraged many businesses and removed operational difficulties and employment generated. Moreover, even increasing geopolitical spate in the South China Sea, Indo-Pacific by the US and its regional allies and rising protectionism, decoupling and delinking could not derail its economy. Its industrial production achieved an annual growth of 5.8& in 2024, up from the 4.6% growth in 2023 due to which it has made remarkable growth in its pursuit of high-quality development, expanding electric vehicle production, increasing train travel, achieving record agriculture productivity, grain harvests, and boosting foreign trade breaking the shackles of enemies of progress, prosperity and peace.
Its foreign trade has become an ultimate victor during 2024. It reported an unprecedented trade surplus of nearly US$1 trillion. Even the latest report of the General Administration of Customs reaffirmed diversity and development capacity reaching to US$3.58 trillion, while imports totalled US$2.59 trillion, resulting in a valuable surplus of US$990 billion. Additionally, it is also further confirmed by the comparative analysis that China produces about one-third of the world’s manufactured goods, more than the combined output of the United States, Japan, Germany, the Republic of Korea and the United Kingdom. December 2024 was particularly impressive, achieving a record monthly surplus of US$104.8 billion.
Obviously, China’s record export growth is based on significant investments in higher education, qualitative manufacturing and infrastructure. Chinese universities produce more engineers every year than all American colleges across all disciplines. Despite increasing opposition, many importers see China as the most competitive supplier in the world. Interestingly on the other hand, the inflows of the FDI has been further maintained showing its vast market potential, diversification of its larger consumer market and last but not least, golden opportunities making investments in lucrative sectors like health, hospitality, robotics, digitalization, real estate, construction and engineering.
Remarkably, the private sector remained robust projecting the business friendly policies of the Chinese government creating win-win situation and mutual beneficial propositions for the all stakeholders. Moreover, further relaxing of restrictions on foreign investment further boosted confidence of the private sector which achieved economic wonders. The real estate sector experienced necessary positive adjustments, including reduction in mortgage rates for home purchases and lowering transaction taxes and down payment ratios, all aimed at stabilizing the market and overcoming the downturn. It is suggested that the policy makers of China should follow a more productive fiscal policy soft monetary policy for 2025 further gearing the industrial growth and digitalization in the country. Resultantly, further strengthening of unconventional countercyclical adjustments will boost domestic demand across all sectors.
Moreover, it is suggested that government of China should also consider issuing a larger number of government bonds, including ultra-long special treasury bonds and special local government bonds for reducing budgetary deficits during 2025 and beyond. It is proposed that Donald Trump’s thundering high tariffs would affect the Chinese economy thus it urgently needs an “Alternative Contingency Exports Plan” diverting it towards emerging economies of Asia, Africa, Middle East, Latin America and APEC, and ASEAN. The author anticipates severe onslaught on the Chinese BRI and most recent leaving of Panama is the prime example of the US political pressure. Ukraine and any country from the ASEAN would also consider leaving the BRI during 2025 and beyond.
The author fears that Chinese real estate industry would create serious challenge for the policy makers in 2025 affecting its construction sector. Even the housing slump would remain visible which must be tackled through meaningful policies. Thus further consumer spending consolidation would be the way forward. Thus Chinese policy makers should further invest and innovate the private sector further enhancing GNP, and job opportunities and boosting consumer confidence. Therefore, rising national and provincial debts and high unemployment ratios’ bad effects should be curtailed. Special efforts are needed to encourage domestic savings and generation of new jobs. The Chinese policy makers should introduce sensible structural reforms boosting the macro-economy, strengthening measures to support the private sector, and more actively engage with emerging markets in the Global South.
—The writer is President, Pak-China Corridor of Knowledge, Executive Director, CSAIS, regional expert: China, CPEC & BRI.
(mehmoodulhassankhan@yahoo.com)
