There is no rocket science, magical secret, or something fishy in China’s development miracle posting GDP growth rate at 6.9 percent in 2017, higher than set targets. It is the outcome of an economic management system that has been put in place in tune with vision of the political leadership to let everybody cherish the taste of sustainable progress.
Recent data released by National Bureau of Statistics (NBS) of China put the growth rate at 6.9 percent against the forecast 6.5 percent has set the stage for resilient growth. It has impressed the world at a time when speculation was doing rounds that the Chinese economy was losing steam. Naysayers have also eaten humble pie as clear facts cannot be dismissed.
Statistics connote that China’s economic management system has proven itself highly sustainable and mature, offsetting market turmoil and financial nuisances. Aspiring to be a beneficiary of roaring economic growth, overtly or covertly, every country wants to board the express train of China’s progress.
China’s economy gained momentum as the real economy performed well throughout 2017. “The added value of large-scale industrial enterprises above designated size in the country soared by 6.6 percent from a year earlier, an increase of 0.6 percentage points from the previous year. From January to November 2017, the profit of industrial enterprises above designated size increased by 21.9 percent from the same period of last year, and the revenue from main operations increased by 11.4 percent,” NBS data revealed.
China's seamless growth in industrial production is one of the driving forces behind the saga of epic development in every sector.
NBS data disclosed “In 2017, the total volume of China's import and export of goods accelerated by 14.2 percent over the same period last year, completely reversing the sharp decline in the same period in 2016. Among them, the import of goods increased by 18.7 percent over the same period of last year, and the export of goods increased by 10.8 percent over the same period of last year.”
According to the World Bank forecast, from January to November, China's total import and export of goods accounted for 8.8 percent of the world's total imports and exports, higher than the same period last year. “The improvement of China's foreign trade not only has a positive impact on world trade but also contributed to the steady recovery of the world economy.” the forecast stated.
One of fabulous economic strategies helping GDP growth is concentration on international cooperation that leads to rapid development of regional economies. Throughout last year, the total import and export volume between China and Southeast Asian countries reached nearly 3.5 trillion yuan, an increase of 16.6 percent over the same period of last year.
The Belt and Road Initiative unleashed by China has been anchoring regional economic activity. This is going to fuel ever increasing GDP growth. Since 2017, investment cooperation with countries along the Belt and Road has been steadily advancing. According to the data from the Ministry of Commerce, Chinese enterprises have conducted non-financial direct investments of US $14.36 billion in 59 countries along the Belt and Road, accounting for 12 percent of the total amount in the same period.
The structural reforms on the supply side have also played their significant role in accelerating GDP rate in 2017. Due to reforms, industrial capacity rose 3.7 percentage points from the previous year. The iron, steel, and coal industries hit their annual goals. High-tech manufacturing growth took everybody by storm; its revenue increased by 13.4 percent in 2017.
Experts believe that GDP is destined to grow as reforms continue in agriculture, new machinery, better technology, and digitization of infrastructure.
Under the creative leadership of Chinese president Xi Jinping, reforms have bolstered economic efficiency by promising profit incentives to rural collective enterprises (which are owned by local government but are channelized by market principles) family farms, small private businesses, and foreign investors and traders. To ramp up agricultural output, steps continue to expand property rights in the countryside. Opening up private agri-industries has led to more productive (family) farms and more efficient use of labor. Together these factors enticed many workers to move out of agriculture. The resulting robust growth of village enterprises has attracted a number of people from traditional agriculture into higher-value-added manufacturing.
Another factor that contributed well in keeping economic growth stable is a hike in foreign exchange reserves in December 2017. The sheer momentum of foreign exchange reserves disappointed critics’ statistics and estimation. Credit goes to tight regulations and a strong yuan that dampened frequencies of capital outflows. Reserves ballooned to $3.14 trillion.
Economic indicators reflected through National Bureau of Statistics (NBS) are akin to a breath of fresh air. Data shows that the real estate sector has been improving as total investment in real estate development in 2017 stood at 10,979.9 billion yuan, an increase of 7.0 percent year-on-year.
Integration of Real economy with Artificial Intelligence (AI) is believed to be the widely known secret electrifying China’s growth. China's State Council is aggressively working on developing domestic artificial intelligence industry worth $150 billion, an AI hub which is similar to Silicon Valley.
With progress in AI, China will be experiencing the fourth industrial revolution to join global productivity that has been projected to grow by 14 percent in the next thirteen years. According to data made public by the National Bureau of Statistics, Xi’s government spent 1.57 trillion yuan last year on technology research and development, an increase of 10.6 percent.
Undoubtedly, China has eventually found a unique niche in the world's economy by gradually shifting from a manufacturing-led to a service-oriented economic system. Keeping stagnation at bay and welcoming market-based paradigms to increase profit and incentives are the open secrets that have put China on high pedestals of progress.