‘Resilient and dynamic’ economy will boost China’s growth
Despite the short-term economic challenges facing China, the fundamentals of the economy remain stable and will be the springboard for future growth, a Chinese central bank official has said.
Zhang Qingsong, deputy governor of the People’s Bank of China (PBOC), made the remarks at the second Global Financial Leaders’ Investment Summit in Hong Kong.
Addressing the concerns of some global investors over the Chinese economy, Zhang cited China’s large working-age population and rapid growth in research and development investment as key driving forces for growth.
Noting that the Chinese economy is facing some challenges this year, Zhang said that in general, the economy is resilient and dynamic, with recovering its momentum in the third quarter of this year.
He said China’s economy had grown by 5.2% in the first three quarters of this year, with indicators ranging from industrial production, retail sales and employee income pointing to an improved situation, official data showed.
Zhang addressed some of the key concerns of global investors, including the local government debt issue and problems in the property sector. He said that the overall debt level of the Chinese government is in the middle to lower range by international standards, and local government debt is a “structural issue”, as most debts are issued by governments in the eastern and central provinces where the size and growth of economic output outperform others.
As for the property market, Zhang said that certain correction is normal, but he said it is necessary to manage its pace to avoid sharp downturns.He added that the government has rolled out many policies to stabilize the property market this year.
In the long run, he said China still has much room for urbanization, which will boost housing demand, adding that he is “quite optimistic” about the future of China’s property market.
The banker’s optimistic forecasts were supported by China’s latest GDP figures – it is projected to grow by 5.4% in 2023, according to the International Monetary Fund (IMF).
While of a visit to China, the IMF’s First Deputy Managing Director, Gita Gopinath, said: “The Chinese economy is on track to meet the government’s 2023 growth target, reflecting a strong post-Covid recovery.”
An IMF team, led by Sonali Jain-Chandra, Mission Chief for China, held constructive discussions with senior officials from the government, the People’s Bank of China, private sector representatives, and academics to exchange views on economic prospects and risks, reform progress and challenges, and policy responses, he said.
More new businesses opening in China
The number of new business registrations in China continued to rise in the first nine months of the year, new figures have shown.
Some 24.81 million new business entities were established during the January-September period, up 12.7% year on year, according to data released by the State Administration for Market Regulation (SAMR). Of the total, the number of new companies went up 15.4%, while the number of self-employed businesses grew by 11.7%.
The number of new foreign-funded enterprises grew by 29.3% from a year ago.
An SAMR spokesman said the figures point to improving market expectations and recovering confidence, adding that the Chinese market remains a popular investment destination.
He said the substantial rise in business registrations was consistent across the board, spanning both traditional agriculture and modern industries. In the accommodation and catering sectors, which were hit the hardest during the Covid-19 pandemic, reported an increase in business registrations by more than 40%.
The spokesman said government policies aimed at boosting domestic demand, fostering confidence and supporting the private economy had boosted growth.
As of 30 September 2023, the number of registered business entities nationwide stood at 181 million, up 6.7% from the end of 2022.
