Global Times editorial (17 July 2022) – According to data released by the National Bureau of Statistics on Friday, China’s gross domestic product (GDP) increased by 2.5 percent year-on-year in the first half of this year, while GDP in the second quarter increased by 0.4 percent year-on-year. Under the impact of unexpected factors such as the Russia-Ukraine conflict and new waves of COVID-19 outbreaks, we have withstood the test, achieved positive growth, and stabilized the economy. This has not been easy, and the Chinese economy has once again shown great resilience.
Judging from the overall trend of the first half of the year, it is not difficult to see that the economy performed fairly well in January and February. In March and April, it was severely affected, and in May and June, it showed a trend of gradual stabilization and recovery. The overall economic trend showed a V-shaped rebound. Foreign trade, manufacturing and other fields have achieved higher-than-expected growth, especially high-tech manufacturing, and the output of new energy vehicles and solar batteries has also increased significantly. At the same time, summer grain production has seen a bumper harvest, which will help ensure the country’s food security and avoid risks at a time when the shadow of a food crisis looms over the world. These all indicate that the difficulties are temporary, and the strong endogenous momentum of the Chinese economy will continue to play a role.
In addition to the inherent resilience of the Chinese economy, the fact that it was able to make a turn for the better under extremely difficult conditions can also be attributed to the obvious results of a series of policies that aim to stabilize the economy pushed forward by the Communist Party of China (CPC) Central Committee and the State Council in a timely manner. In other words, this is a manifestation and proof of China’s economic governance capabilities. “Intrinsic resilience” and “governance capability” are the two most critical factors for us to assess and judge the current situation and prospects of China’s economy, and they are a strong foundation for our continued confidence and optimism.
Optimism is by no means the same thing as avoiding problems, and blind optimism can never overcome obstacles. The road ahead for China will not be smooth: global economic recovery is still fragile and weak, the risk of widespread stagflation is rising, domestic epidemics are still sporadic, sluggish domestic demand and supply shocks have become intertwined, structural contradictions and cyclical problems are superimposed, and market entities are still facing difficulties. The foundation for sustained economic recovery is not stable. All of these pose challenges to China’s future development. Injecting confidence and impetus into the overall recovery of the economy, especially in stabilizing employment, stabilizing prices, and activating the vitality of market players, still faces severe tests. In this regard, the Party and the government have a clear, profound and truth-seeking understanding, and have active and prudent countermeasures in place.
It is worth mentioning that in recent years, China has insisted on implementing a steady monetary policy, leaving sufficient policy space and tools in reserve to cope with new challenges and unexpected changes. According to data released on Friday, the added value of high-tech manufacturing increased by 9.6 percent year-on-year, 6.2 percentage points faster than all industries above designated size. Further adjustment and optimization of the economic structure will certainly enhance the resilience and vitality of the Chinese economy.
The recent incidents involving some rural banks in Central China’s Henan Province and some unfinished residential projects that have ignited public opinions have attracted the attention of the relevant authorities, and it is believed that their risks will be effectively controlled. They are long-term problems accumulated during economic development, but have recently emerged in a concentrated manner, indicating that short-term difficulties have been superimposed on the economic transformation period, and it is easy to expose these accumulated problems. Various recent situations have further demonstrated that epidemic prevention, economic stabilization, and the safety of development are all essential.
The basic characteristics of China’s economy such as sufficient potential, great resilience, and strong vitality have not changed. Compared with other major economies in the world, China’s “troubles” are more short-term and temporary. At the same time, China’s status as a major manufacturing country is more stable, which enhances our ability to resist risks.
Most importantly, under the strong leadership of the CPC Central Committee, concentrating on big tasks has always been China’s prominent advantage. Now that we have identified the problem and have a strong determination and a clear path, we will be able to resolve the difficulties. There will be ups and downs in the future, but as long as the whole of society works together, there will be no hills that cannot be climbed or hurdles that cannot be overcome.