Chinese economy continues to gain momentum
The Chinese economy is gaining momentum:
Zheng Shanjie, head of the National Development and Reform Commission, said the country will focus on employment, industry, investment, consumption, prices, environmental protection and regional development, all of which will support the country’s high-quality development.
He said the country will increase spending, expand investment and promoting the construction of 102 major projects as set out in the 14th Five-Year Plan (2021-25), as well as other projects key to economic and social development.
More efforts will also be made to boost innovation-driven development, accelerate the push for modernizing industry, develop emerging industries and the digital economy and promote the upgrading of the traditional industries, Zheng said at the recent China Development Forum in Beijing.
“When it comes to the drivers of the Chinese economy, China’s economic development is supported by quite a number of favourable conditions, including a well-functioning industrial system, an ultra-large domestic market, the world’s biggest middle-income groups and a strong development foundation,” he said.
Regarding China’s economic performance in the first two months of 2023, Zheng said the economy is picking up, with a marked improvement in both supply and demand.
However, there are still challenges ahead of the Chinese economy, Zheng warned.
Looking into the future, he said China would be looking to attract foreign companies to invest in China and share in the country’s development opportunities.
Zheng said the country will deepen reforms and continue to open up to foreign businesses, “to promote the building of a high-standard market system and foster a world-class business environment that is market-oriented, law-based and internationalized”.
To support Zheng’s analysis, China’s State Administration of Foreign Exchange has announced that trade in services reached 459.5 billion yuan (£54.1bn) in January alone, with transport and travel driving the growth.
Industry experts said the Chinese economy in the services sector has been bolstered by soaring growth in foreign creative and cultural trade and knowledge-intensive services.
They also noted that China’s trade in services was contributing to the ongoing global economic recovery, mainly because of government policies that seek to make the opening up of the economy broader and deeper.
Zhang Wei, chief expert of the Shanghai-based China Association of Trade in Services, said one potential driver of China’s future economic growth could be the rising exports of human capital-intensive services, which require a higher level of expertise and skill. These services could include technology consulting, engineering, and research and development, he said.
He added that rising demand for high-quality foreign services among the country’s growing middle-income earners will be another factor contributing to the national economy. These services include education, tourism, healthcare and entertainment.
And Zheng Wei, assistant researcher at the Shanghai-based China Service Outsourcing Research Center, said “a distinct upside still exists in the growth of trade in services in China as its scope now extends to artificial intelligence, the metaverse and other such fields, with huge potential for high growth”.
The Chinese economy in knowledge-intensive services rose nearly 8% year-on-year to 2.51 trillion yuan in 2022, said the Ministry of Commerce. Travel services continued to recover last year as trade in this sector rose more than 8% year-on-year to nearly 856 billion yuan.
There are early indications that China is ready for an outbound travel boom. In January and February, bookings for international flights grew 450% and tour packages and attractions jumped 190% compared with the same period last year, according to Simeon Shi, chief strategy officer and head of corporate development for Fliggy, an online travel platform based in the Chinese economy.
At the same time, the Chinese traveler is different from the pre-pandemic one thanks to three years of strict lockdowns. Fliggy’s Shi said they have a stronger interest in experiences and local attractions they find over social media over famous ones.
“As travel service providers, we should take time to study the changing needs of the Chinese customers and how we can meet their diverse needs in a more efficient way,” Shi said.
