China’s insurance market to double in 10 years, Swiss Re CEO says

The size of China’s insurance industry is expected to double in the next 10 years amid strong economic growth, making the country an even more important market for the group, said Christian Mumenthaler, group CEO of Swiss Re.

China’s economy continued its steady recovery in April, official data released on Friday showed.

The country is expected to maintain an annual economic growth rate of about 5 percent, continuing to rank among the world’s fastest-growing economies, Mumenthaler said in an exclusive interview with China Daily.

China’s insurance market is growing faster than its economy, Mumenthaler added.

“The size of premiums could double in 10 years, so we want to be part of that. I’m very excited about the market opportunities in China,” he said.

Debunking the fallacy of ‘Chinese economic data less transparent’

Economists' VIEW logo

Illustration: Chen Xia/Global Times

Illustration: Chen Xia/Global Times

Since the beginning of this year, foreign media outlets and institutions have been throwing mud at the Chinese economy by accusing it of a “lack of transparency in Chinese economic data.” Citing cases of individual Chinese provinces revising data from previous years, they claimed that the revisions were due to a previous falsification. 

However, on the other hand, institutions such as the IMF have maintained high expectations for China’s economic growth. For example, in early February of 2024, the IMF released a report predicting that China’s economy will grow by 4.6 percent in 2024. On April 10, Goldman Sachs released a research report raising its forecasts for China’s year-on-year economic growth for the first quarter of 2024 to 7.5 percent and a 5 percent from 4.8 percent for the whole year. 

How can we debunk the fallacy of “lack of transparency in Chinese economic data”?

To begin with, China’s economy is currently undergoing a period of structural adjustment, requiring attention to both addressing existing issues and sustaining robust development momentum. It is necessary to consider these two aspects as a whole rather than just looking at one-sided data.

Since 2022, China’s real estate sector has undergone a major adjustment, leading to a continuous weakening of the related industry investment chain and exposing debt risks in some regions or companies. Over the past 20 years, the real estate market has been booming, but the drawbacks brought about by a development model based on high leverage, high debt, and high turnover need to be addressed. Moreover, the interests involved in this industry are very broad.

Even so, at least seven or eight years ago, the government, enterprises, and academia were actively planning for new industries, new models, and new arenas, accumulating a considerable development foundation. Therefore, new growth points have emerged, including new-energy vehicles, lithium-ion batteries, photovoltaic equipment, among others. 

In sectors including infrastructure construction, clothing, food, housing, transportation, education, healthcare, and aged care, China’s robust domestic demand market continues to thrive, driven by a sizable population, ongoing urbanization, and rising consumer spending levels – attributes not fully shared by other major economies.

According to the latest statistics, the total number of middle-income individuals in China has exceeded 500 million. China is the world’s second-largest consumer market and second-largest import market, as well as the largest automobile market, consumer electronics market, and online retail market. China’s manufacturing industry accounts for nearly 30 percent of the global total. The robust domestic market cycle, along with a steady export market, provides a solid foundation for the Chinese economy to weather fluctuations in the real estate sector.

The Purchasing Managers’ Index (PMI) for March showed that the PMI has been in the expansion territory for five consecutive months. The Consumer Price Index (CPI) has moderately rebounded, and exports have also increased. This indicates that the Chinese economy is indeed undergoing structural adjustments, and the process of eliminating the dependence on real estate is also underway. The consistent trend of economic stabilization and recovery persists.

Second, the lack of structural research on China’s economic data, confusing concepts, and oversimplified comparisons all contribute to “self-misleading” conclusion of the fallacy of “lack of transparency in Chinese economic data.”

When analyzing economic data, it is important to observe in terms of both amount and structure, as well as the corresponding context. In times of significant economic changes, it becomes even more essential to have structural analysis in mind. 

A very typical case is that many foreign media and institutions have claimed that “foreign investment is not coming to China” based on the data from the State Administration of Foreign Exchange (SAFE). In fact, the rules for data statistics by the SAFE and the Ministry of Commerce (MOFCOM) are different, and from the perspective of both the stock and increment of foreign investment in China, the situation is not negative, and there are even some promising aspects. There is no such thing as “lack of transparency in Chinese economic data.”

Taking the foreign direct investment data from the second quarter of 2023. There are differences between the data from SAFE and MOFCOM. In fact, the SAFE data was compiled according to the “asset/liability principle,” while the MOFCOM data was compiled according to the “directional principle.”

Currently, most countries, including China and the US, compile foreign direct investment data based on the “directional principle” because this method can more directly reflect the source of investment and assess the situation of foreign investors entering the country, making it easier for international comparisons. 

Generally, foreign direct investment data compiled with the “asset/liability principle” is usually higher than the data compiled with the “directional principle.” However, in recent years, there have been cases where the latter is higher than the former. Regardless of which data is used, it is not accurate to simply say that “Chinese economic data is not transparent” or to conclude that “foreign capital is withdrawing from China.”

Last but not least, foreign media and institutions view the Chinese economy with an ideological bias, deliberately exaggerating and sensationalizing individual cases in an attempt to influence public perception.

Driven by their own sense of superiority, some foreign media and institutions do not accept the reality that the Chinese economy is steadily recovering and can withstand internal and external pressures. They hold biased and skeptical attitudes toward Chinese economic data. 

By highlighting the cases of data falsification by some Chinese companies, they magnify external concerns with the aim of influencing the perception of China’s economic governance. In response, we must not only pay full attention to and legally crack down on the falsification of data by individual companies, continuously improve supervision mechanisms, but also firmly counter the narrative of “lack of transparency in Chinese economic data” by some foreign media and institutions.

Currently, the various levels of investigation teams directly under the National Bureau of Statistics (NBS), including provincial, municipal, and county-level teams, are legally conducting data collection and screening, playing a significant role in ensuring the accuracy of data. Based on these data collection efforts, they are cracking down on cases of false reporting, over-reporting, and under-reporting. 

For a long time, China’s economic governance and decision-making have been based on seeking truth from facts, relying on data from the NBS to have a full understanding of objectively existing problems. In recent years, a series of specific measures to boost the economy have been proposed based on these data and changes in the internal and external environment. Therefore, China does not have the motivation to “obscure” economic data. 

The author is a senior financial observer. [email protected]

Expert: 2024 growth target is achievable

China’s economic outlook is poised to improve in the following months, buoyed by robust fiscal spending, and the country’s growth target of around 5 percent for 2024 is achievable, according to a renowned economist.

Huang Yiping, dean of Peking University’s National School of Development, told China Daily in an exclusive interview that the nation’s economy is relatively stable. “There is hope that the economy may continue to improve, given that the government will expand its fiscal spending and provide more support to economic growth in the coming months.”

Huang called for more efforts to further boost economic recovery and stabilize the employment rate, which will bolster consumer confidence and increase incomes for households.

Click the video to learn more.

GT Voice: To reassure Chinese investors, Philippines needs to do more

Illustration: Chen Xia/GT

Illustration: Chen Xia/GT

If the Philippines wants to reassure Chinese companies about investing in the country, it may need to take tangible steps to mitigate risks for Chinese investors, rather than just providing optimistic rhetoric.

Philippine President Ferdinand Marcos Jr said that business deals that the Philippines secured at a summit with Japan and the US will not affect China’s investments in the country, Reuters reported on Friday.

Despite the diplomatic shift, the Marcos government may still hold some pragmatic thoughts on maintaining economic and investment ties with China due to the Philippines’ economic needs, but pressure from Washington and Tokyo could pose a dilemma. 

It is not hard to see that in collusion with the US and Japan to serve their strategy of containing China, the Philippines has plunged itself into a geopolitical tug-of-war, which other ASEAN countries have been trying to avoid in their regional diplomacy.

Given the Philippines’ recent tough attitude toward China and its hype about the “China threat” at a trilateral summit with the US and Japan, it is impossible to expect that such developments won’t dampen Chinese investors’ confidence in the country. 

Yet, no one can easily deny the importance of trade between China and the Philippines, especially at a time when the Southeast Asian country is grappling with multiple challenges such as inflation, energy security and outdated infrastructure. 

Like other ASEAN members, the Philippines maintains strong economic and trade ties with China, a vital trading partner and investment source. Chinese investment, particularly in infrastructure, plays a critical role in the economic development of the Philippines.

Take China’s State Grid’s investment in the National Grid Corp of the Philippines as an example. This is a landmark project that underscores China’s important role in infrastructure development in the country. State Grid Corp has successfully operated the national transmission grid in the Philippines using its management experience and relevant technologies, contributing stable support for the country’s electricity supply and bringing tangible benefits to the economic and social development of the Philippines.

If anything, this is a prime example of why Marcos still tries to tread a fine line with Chinese investment. Normal economic and trade relations with China are still in line with the interests of ASEAN countries.

Under such circumstances, it is up to the Marcos government to stabilize economic and trade ties with China, especially Chinese investment in the Philippines.

A conducive environment is essential for any investment to thrive. However, excessive political risk can undermine investment confidence. Unfortunately, this is what many Chinese companies may fear in investing in the Philippines. 

Even in the case of State Grid, the project has encountered political obstacles, highlighting the complexity of Chinese investment in the Philippines. In May 2023, Marcos reportedly backed a probe to determine whether the government should take over the country’s sole power grid operator, in part due to national security concerns, Nikkei Asia reported.

Obviously, the investment environment could become more complex and unpredictable. While the US and Japan promised some economic assistance to the Philippines during the trilateral meeting in Washington last week, they also urged the Philippines to diversify supply chains to reduce reliance on China. It is apparently an attempt to push the Philippines to “decouple” from China. 

For instance, the three countries agreed to forge ties to strengthen supply chains for nickel, a critical mineral essential for the batteries used in electric vehicles, a move aimed at creating a supply chain that is not overly dependent on China, The Japan News reported on Sunday.

As an ASEAN member, the Philippines should keep pace with ASEAN members in economic and trade relations with China. If the Philippines wants to rely on military alliances with the US and Japan to resolve the South China Sea issue, it will be hard to reassure Chinese investors about the investment environment in the Philippines.

At the same time, the Philippine government must implement concrete measures to mitigate risks for Chinese enterprises and foster a conducive investment climate, rather than offering oral promises. These actions should include, but not be limited to, bolstering legal safeguards with clear, transparent and business-friendly policies, as well as ensuring a stable political and economic landscape.

European leaders coming to China to seek cooperation expansion amid decreasing bilateral trade

An aerial drone photo taken on Jan. 16, 2024 shows vehicles at a terminal of Dalian Port, northeast China's Liaoning Province. Dalian Port achieved a record-breaking annual export of 102,773 vehicles in 2023, marking a year-on-year growth of 143 percent, according to the Dalian Customs.(Photo: Xinhua)

An aerial drone photo taken on Jan. 16, 2024 shows vehicles at a terminal of Dalian Port, northeast China’s Liaoning Province. Dalian Port achieved a record-breaking annual export of 102,773 vehicles in 2023, marking a year-on-year growth of 143 percent, according to the Dalian Customs. Photo: Xinhua

After senior officials from the Netherlands and France visited China, other European leaders are following suit, which analysts said is aimed at seeking cooperation expansion with China amid the EU’s internal economic problems and decreasing bilateral trade with one of its most important trade partners.

China’s foreign trade with the EU stood at 1.27 trillion yuan ($176 billion) in the first quarter of 2024, down 3.5 percent year-on-year, at a time when China’s total imports and exports grew 5 percent, the fastest pace in six quarters, to hit a record of more than 10 trillion yuan, according to statistics released by the General Administration of Customs of China on Friday.

China was the largest partner for EU imports of goods – accounting for 20.5 percent – and the third largest partner for EU exports of goods in 2023, data from the EU’s statistical office showed.

Analysts noted that European countries are seeking to expand cooperation with China, especially in high-end manufacturing, and maintain pragmatic economic and trade cooperation in general, at a time when most EU member states are facing weak economic growth, insufficient impetus for technological innovation and the spillover effects of the Russia-Ukraine conflict.

According to a survey by the European Central Bank (ECB) of the bloc’s biggest firms released on Friday, the eurozone economy is making a timid and incomplete recovery, driven by higher spending, but is being held back by sluggish investment and labor demand.

Another ECB survey also released on Friday forecast GDP growth of just 0.5 percent for 2024, after the EU’s economy had already stagnated for about a year and a half. Compared with the previous survey in the fourth quarter of 2023, the figure represents a small downward and upward revision of 0.1 percentage points for 2024, read the ECB survey.

The EU is currently under big pressure. European leaders’ visits and planned visits to China are aimed at bringing about more engagement and promoting its economic development through economic and trade cooperation with China, Hu Qimu, a deputy secretary-general of the digital-real economies integration Forum 50, told the Global Times on Friday.

“If the EU only engages in geopolitics, it will actually pay for the US in the end. As a result, the EU’s own economy is in ruins, and so is the well-being of its people,” said Hu.

At the invitation of Chinese Premier Li Qiang, German Chancellor Olaf Scholz will pay an official visit to China from Sunday to April 16, the Chinese Foreign Ministry announced on Friday.

Italian Prime Minister Giorgia Meloni will travel to China in the coming months, Bloomberg reported on Friday, citing a person familiar with the plans.

On Thursday, Chinese Minister of Commerce Wang Wentao met Italy’s Deputy Prime Minister and Minister of Foreign Affairs Antonio Tajani in Verona, Italy. Wang vowed to further cultivate China-Italy relations, and hopes Italy will play a role in calling on the EU to take a rational and open-minded attitude to new energy cooperation with China.

Dutch Prime Minister Mark Rutte paid a working visit to China from March 26 to 27, at a time when the Netherlands’ chip export policy was in the spotlight.

Despite internal economic problems, the EU is also facing outside pressure, analysts pointed out.

Due to pressure from the US, some European countries eventually yielded to the superpower, which damaged their bilateral economic and trade cooperation with China, Zhao Junjie, a research fellow at the Institute of European Studies of the Chinese Academy of Social Sciences, told the Global Times.

Analysts also criticized the US for using long-arm jurisdiction to force its allies to become foot soldiers in its containment and “decoupling” strategy against China.

China’s anti-dumping probe into EU brandy doesn’t target any member: commerce minister

China EU Photo:VCG

China EU Photo:VCG

Chinese Commerce Minister Wang Wentao said on Monday in France that China’s anti-dumping investigation into brandy imported from the EU does not target any specific EU countries nor carry predefined findings, as China and the EU have strengthened communication recently to clear the clouds hanging over bilateral economic and trade cooperation.

Analysts said that China’s anti-dumping probe into the brandy imports is fundamentally different from the EU’s politically motivated anti-subsidy investigations into Chinese electric vehicles (EVs).

They urged the EU to increase its strategic independence and join hands with China to appropriately deal with disagreements through dialogue for the benefit of both sides as well as global economic growth.

The anti-dumping investigation was prompted by a complaint submitted by China’s brandy industry, Wang said when meeting with three French brandy trade associations and five French brandy producers in Paris, according to a statement on the Ministry of Commerce (MOFCOM) website.

China will conduct the investigation openly and transparently in accordance with Chinese law and WTO rules, while fully safeguarding the rights of all stakeholders, the minister said.

Wang’s remarks came as Western media outlets hyped the Chinese move as a tit-for-tat countermeasure to the EU’s anti-subsidy investigations into Chinese EVs.

“The EU’s protectionist move is purely a political decision by the European Commission, which is groundless and violates WTO rules,” Zhang Jian, vice president of the China Institutes of Contemporary International Relations, told the Global Times on Tuesday.

Zhang blasted some European politicians – under pressure from the US – who advocate “de-risking” against China, resulting in serious disruptions to normal China-EU economic and trade cooperation.

Amid the global trade slowdown and other factors, China-EU trade in goods slipped 7.1 percent year-on-year to reach $783 billion in 2023, according to data released by China’s General Administration of Customs.

However, recent frequent exchanges between senior Chinese and European officials have sent a positive signal of deepening China-EU economic and trade development, Yang Chengyu, an associate research fellow at the Institute of European Studies of the Chinese Academy of Social Sciences, told the Global Times on Tuesday.

According to Western media reports, German Chancellor Olaf Scholz will visit China in mid-April with a business delegation. Some leading German companies confirmed to the Global Times the participation of their CEOs in the delegation.

As economic and trade relations remain a ballast stone for China-EU relations, deepening pragmatic cooperation in more sectors conforms to both sides’ interests, according to Yang.

“The EU is pursuing a green and digital transition, while China has notable production capacity advantages in these areas. Thus, increased economic and trade cooperation will contribute to the bloc’s development and prosperity,” Yang said, noting that “de-risking” will risk losing opportunities from the huge China market.

Wang met members of the French business community including Airbus CEO Guillaume Faury and BNP Paribas Chairman Jean Lemierre. During the meetings, the French companies said that they are firmly positive about China’s economic prospects and business environment, with commitments to long-term development in the market, according to a separate statement on the Chinese Commerce Ministry’s website.

Along with China’s high-level opening-up, European companies have rapidly increased investment in the market for greater opportunities. Volkswagen has established its largest overseas research and development (R&D) center in North China’s Tianjin. 

Valeo has announced plans to build a comfort and driving assistance systems manufacturing and R&D site in Shanghai. AstraZeneca will invest $475 million to build a small molecule drug factory in Wuxi, East China’s Jiangsu Province.

During Wang’s meetings with French officials and business executives in Paris, he stressed that China is promoting high-quality development and accelerating the development of new quality productive forces so as to create a fair competition environment for domestic and foreign enterprises, providing wider opportunities for European companies, including those from France.

China is willing to join hands with France to give play to existing economic and trade mechanisms to appropriately control disagreements through dialogue and cooperation and strengthen efforts to address each other’s reasonable key concerns, Wang said.

It’s normal that China and the EU have disagreements, experts said. With understanding and consensus, the two sides will be able to appropriately deal with these disagreements and boost China-EU economic and trade cooperation to a direction that benefits both sides, Zhang said, expressing optimism for the prospects of bilateral trade cooperation.

GT Voice: China-Russia trade can withstand escalating pressure from the West

Illustration: Chen Xia/GT

Illustration: Chen Xia/GT

Russian Foreign Minister Sergey Lavrov arrived in Beijing for an official visit on Monday. With escalating Western sanctions on Russia, how China-Russia economic and trade cooperation will be affected has become a topic of concern. 

Against this backdrop, Lavrov’s latest visit to China is being closely watched by observers with great interest. The visit comes at a time when economic and trade cooperation between China and Russia is at a critical juncture. 

On the one hand, Moscow has accelerated the shift of its economic cooperation focus to the Asia-Pacific market, with China emerging as a key player. The scale and quality of China-Russia economic exchanges are steadily improving, covering areas like trade, industry, agriculture, logistics and infrastructure.

On the other hand, the US and its European allies have been ramping up sanctions on Russia, which have exerted tremendous pressure on the Russian economy and led to unprecedented challenges to the economic and trade relationship between Russia and China. 

It can be anticipated that China-Russia trade will face more strains than ever under the Western pressure. For instance, even during a visit to China, US Treasury Secretary Janet Yellen still warned on Saturday that there will be “significant consequences” for China if its companies support Russia, Politico reported.

Western pressure on China over its Russia trade is not just due to the Russia-Ukraine conflict, but also due to strategic goals, such as Washington’s aim of targeting and containing China by means of sanctions. More and more signs show that it is actually a tactic of the West to point a finger at normal trade between China and Russia, which aims to use the opportunity to hurt Chinese companies and hinder the development of Chinese manufacturing and businesses.

However, Chinese Foreign Ministry spokesperson Mao Ning said in a press conference in February that normal trade and economic cooperation between China and Russia is not targeted at any third party or subject to any interference by any third party. 

China firmly opposes illegal unilateral sanctions against Chinese companies and will take necessary measures to resolutely protect the legitimate rights and interests of Chinese companies, Mao said.

China remains steadfast in its position on this matter. Like many other developing countries and emerging economies, China is committed to pursuing its own interests while also adhering to international norms in economic and trade cooperation. Despite external pressures, China’s willingness to continue economic and trade cooperation with Russia will not change. 

China will not compromise its basic principles or its stance due to the long-arm jurisdiction of the US, nor will it become a follower of any other country’s strategy. Chinese companies may take precautions to mitigate risks, but their willingness to cooperate and adhere to those principles will remain unwavering.

The deepening cooperation between China and Russia is a strong manifestation of the resilience of their trade, which is unlikely to be affected by Western sanctions in the long run. This year marks the 75th anniversary of the establishment of diplomatic relations between China and Russia, with bilateral trade flourishing at a record pace. In 2023, China-Russia trade reached $240.11 billion, up 26.3 percent compared with the previous year.

Also, about 92 percent of trade settlements between Russia and China are now conducted in Russian rubles and the yuan, Russian Deputy Prime Minister Alexey Overchuk said at the Boao Forum for Asia last month.

Such developments show the strong vitality and potential of China-Russia economic cooperation, which enjoys a high degree of trade complementarities, political mutual trust and diversified areas for cooperation. All these factors together constitute a strong foundation for bilateral trade, enabling it to withstand challenges amid the complex international environment.

Debunking flawed Western narrative – ‘China’s economy peaks’

A view of the skyline of Beijing's CBD area. Photo: VCG

A view of the skyline of Beijing’s CBD area. Photo: VCG

Bearish views about China’s economy appear from time to time but are always proved wrong. Recently, some Western politicians and institutions have come up with the “China peaks” theory, which may seem novel but is exactly the same as the so-called “End of China’s economic miracle” theory back in 2013. 

History is a long-cycle development process, and arbitrary claims of “peak” and “end” often go against logic and common sense.

Over the past decade, the Chinese economy has been moving forward and experiencing waves of development, despite the Western hype shifting from “disappointing” to “near collapse.” In 2023, China’s GDP surpassed 126 trillion yuan, with per capita disposable income at 39,218 yuan, more than double the figures of 56.8 trillion yuan and 18,311 yuan in 2013. The 5.2 percent growth rate is also significantly faster than the US’ 2.5 percent, the eurozone’s 0.5 percent, and Japan’s 1.9 percent. With its contribution to world economic growth continues o exceed 30 percent, China remains an important engine of global economic growth.

In the face of the rosy data and solid facts, where did the “China peaks” theory come from?

First, the “pandemic impact” rhetoric says that the COVID-19 pandemic has accelerated the process of peaking.

Indeed, the three-year COVID-19 pandemic has had a significant impact on both the world and the Chinese economy. But historically, no matter how severe a pandemic is, it is a short-term issue. No matter how big the impact on the economy, it will not fundamentally change its long-term development trend. China was the first major economy that saw growth resume after the pandemic. Now, its “scar effect” on China’s economy has faded. Last year, the total retail sales of consumer goods in China exceeded 47 trillion yuan, up 7.2 percent year-on-year, indicating that consumption is again driving economic growth.

Businesses are also booming. Boosted by last year’s May Day holidays and National Day holidays and this year’s Spring Festival, renowned domestic brands have introduced new products, various places have promoted local tourism, and a variety of new consumption scenarios have emerged. Whether it is the night economy in Changsha, or the Hangzhou Asian Games, China’s economic recovery is clear for everyone to see. This surging energy is propelling China’s high-quality development forward with renewed vigor.

Second, the “demographic dividend” narrative argues that, with China’s total population now peaking, the disappearance of the demographic dividend will make China’s growth miracle of the past 40 years unsustainable.

In recent years, significant changes have taken place in the size and structure of China’s population. But there are still about 865 million people aged 16 to 59, who are at working age. With the labor participation rate at a relatively high level in the world, China still has abundant labor resources and its demographic dividend hasn’t gone away. Furthermore, in terms of economic development, the input of the labor force is important, but the input of effective labor is even more important. Effective labor can be defined as the product of the number of workers and their level of education. Essentially, compared with the size of the population, the quality of the population is a key determinant of long-term economic growth.

At present, the average years of education of the working-age population in China have risen to 11.05 years, and the number of people that have had higher education has exceeded 240 million. China boasts the largest number of science and technology professionals, as well as research and development personnel globally. China’s large number of science and engineering graduates has formed an “engineer dividend.” Overall, despite the aging population, effective labor has been increasing every year, transitioning from a “demographic dividend” to a “talent dividend.” This offers solid human resources foundation for high-quality development.

Third, it has been claimed that the US’ technological suppression and decoupling will hinder China’s development. This argument suggests that China is still in the process of technological transformation, and Western tech blockades will impact the development of China’s high-tech industry and stymie China’s economic rise.

Can technological suppression block China’s development path? The question has been answered by history more than once. China has been repeatedly besieged and suppressed, but has been able to overcome difficulties even when the economy was still underdeveloped. Today, given the solid material and technological foundations in China, the so-called “small yard high fence” attitude will not stop China’s innovation and development.

Today, China remains committed to keeping its doors open and continues to advance in technology through independent development. China has increased its investment in technological innovation and achieved remarkable progress.

For instance, the domestically produced C919 large passenger aircraft has entered commercial flights. The homegrown large cruise ship has also started commercial operation, and the Shenzhou series of space missions have achieved remarkable success.

China’s cutting-edge technology field is constantly accumulating energy, demonstrating the strength of Chinese innovation. China has the largest number of global top-100 technology innovation clusters in the world, and emerging technologies such as artificial intelligence and blockchain are growing in importance. New-energy vehicles, lithium batteries, and photovoltaic products have become new highlights of China’s manufacturing industry.

China is leveraging the advantages of a new type of national system with concentrated efforts and resources for important events or projects, with abundant talent, a huge market, and complete industrial support. The innovation drive and development vitality of China are flourishing, and new quality productive forces are emerging, demonstrating strong support for high-quality development.

Fourth, it has been claimed that a slowdown in economic growth suggests that a “peak” has been passed. This claim argues that the miracle of high-speed growth of the Chinese economy brought about by special domestic and international opportunities is unsustainable, and that China will fall into a growth stagnation predicament.

After more than 30 years of high-speed growth with an average annual GDP growth rate of 9.9 percent, the growth rate of the Chinese economy has indeed slowed down in recent years, but this is a natural result of the evolution of economic development. 

Throughout history, economies have typically experienced a natural decline in growth rates, transitioning from periods of rapid growth to more stable, moderate growth. This trend is commonly observed in the development of modern economies and is considered an inevitable occurrence. 

In the industrialization process of various countries, such as Germany, Japan and South Korea, after experiencing two to three decades of high-speed growth, the pace of the growth will slow down. This is an entirely normal phenomenon.

Moreover, the phased transition of China’s economic growth is intertwined with the long-term structural adjustment of the world economy and the integration of a new round of industrial revolution. If China continues to pursue high-speed growth, it would not only go against economic laws, but also exacerbate the existing contradictions of traditional extensive growth methods, bringing many risks and causing economic imbalance, lack of coordination, and unsustainability. 

Transitioning to a new stage of growth also means changing the driving forces. Outdated productivity continues to decline, while advanced productivity continues to emerge, forming new growth momentum.

Observing the theme of high-quality development in the Chinese economy, one should not only look at the size, but also the quality. Combining growth data and efficiency data from recent years, the Chinese economy has not peaked at all, but has achieved a qualitative and effective improvement while overcoming many difficulties. 

Currently, China’s comprehensive advantages in human resources, capital formation, infrastructure, and industrial system are outstanding, and the potential for economic development is huge.

For example, the savings rate is still at a high level; a relatively complete and large-scale infrastructure network has been formed; and a large-scale, comprehensive, and strong complementary industrial system has been established. According to calculations by many domestic and foreign research institutions, China’s potential growth rate can still reach around 5 percent for the long run.

Those who repeatedly curse the Chinese economy have had their views rebutted by the facts. Whether it is simply applying Western theories to analyze the Chinese economy, exaggerating short-term issues, having a subjective bias, or acting out of narrow self-interest, the smears are based on misconceptions about the Chinese economy.

The Chinese economy has been advancing steadily, with firm goals and adjustments that keep pace with the times.

Looking into the future, China’s economy has solid support from its huge material and technological foundations, advantages in supply capacity with a complete range of industrial sectors, potential demand advantages from the huge domestic consumer market, talent advantages, advantages in emerging industries, and advantages in continuous institutional innovation through reform and opening-up.

In developing new quality productive forces, the growth potential of the Chinese economy will continue to be unleashed.

China’s economy is currently at a crucial stage of transitioning toward high-quality development. During this process, various problems and challenges are inevitable, such as insufficient effective demand, overcapacity in some sectors, weak social expectations, and numerous hidden risks. China is addressing these problems, making effective use of ample policy space, and continuously introducing targeted measures to resolve them. The performance of China’s economy in 2023 was the best proof.

American scholar George Friedman, who announced the “end of the Chinese economic miracle” a decade ago, wrote that “no one country can replace China, but China will be replaced. The next step in this process is identifying China’s successors.”

Ten years on, China has recorded ever outstanding and profound development achievements: The next China is still China!

The article is an economic commentary first published in The Economic Daily. [email protected]

GT Voice: Rutte visit is rare chance to improve mutual understanding

Illustration: Chen Xia/Global Times

Illustration: Chen Xia/Global Times

While the visit of Prime Minister of the Netherlands Mark Rutte to China on Tuesday and Wednesday has put the European country’s chip export policy in the spotlight, its significance should not be solely focused on the chip sector. 

It actually presents a unique opportunity for China and the Netherlands to enhance their mutual understanding in terms of potential economic and trade cooperation.

Dutch Foreign Trade Minister Geoffrey van Leeuwen, who was also in Beijing as part of Rutte’s delegation, told Dutch business daily FD on Tuesday that defending the interests of ASML was his “number one” priority, according to Reuters. 

In the same interview, Van Leeuwen added that “we also say that the national safety of ourselves and our partners goes before economic interests.”

His remarks serve as a microcosm of the Dutch government’s ongoing efforts to pursue economic opportunities with China amid geopolitical challenges, highlighting the allure of China’s economy for the Netherlands.

It is true that media attention about Rutte’s China visit revolved around whether ASML would receive Dutch government licenses to continue maintaining billions of euros worth of advanced equipment it has already sold to Chinese customers. However, it should be noted that although ASML’s business in China has become an important part of the economic and trade relations between China and the Netherlands, it cannot represent the whole picture of bilateral economic ties.

The bilateral economic and trade relationship encompasses a diverse array of sectors, such as agriculture, services, environmental protection and energy cooperation. These areas of collaboration, which are also important to the economic ties of both sides, are the culmination of years of joint endeavors by both nations and should be valued.

Due to the continuous development of bilateral trade, the Netherlands has become China’s second-largest trading partner in the EU, after Germany. In addition to ASML, Dutch companies like Philips and NXP also have significant business exposure to the Chinese market.

Moreover, since the Netherlands is one of the core member states in the EU, the Chinese-Dutch economic partnership not only brings mutual benefits and cooperation opportunities at the bilateral level but also contributes to global scientific and technological innovation and enhances cooperation between China and the EU.

Of course, there is no denying that China and the Netherlands are both facing pressure from the US. If anything, the technology war initiated by the US against China has had a significant impact on the common interests of the global industrial chain, and this has become a global problem. 

In particular, advanced chip manufacturing equipment exported by the Netherlands has borne the brunt of US restrictions. The pressure has already been reflected in bilateral trade. In 2023, bilateral trade fell 9.8 percent year-on-year to $117 billion, a striking contrast with the 12 percent increase in 2022.

It is understandable that the Netherlands, as an ally of the US and with close economic ties with China, faces a difficult challenge in walking a tightrope between the two largest economies. It is the test that the country must deal with to achieve its own development. 

This also explains why the Dutch business community pinned high hopes on Rutte’s visit. If his visit could enhance the mutual understanding about bilateral cooperation, Dutch businesses may gain more access to the Chinese market. That will be conducive to helping alleviate the downward pressure on the Dutch economy.

In this sense, rather than focusing solely on ASML’s profitability in China, it may be more meaningful to shift attention toward the potential growth and success of Dutch businesses in the Chinese market.

China is dedicated to fostering open cooperation, advancing scientific and technological innovation, and promoting industrial upgrading through mutually beneficial international partnerships. China’s willingness to collaborate with the Netherlands to further enhance bilateral relations has never changed. We appreciate the Dutch government’s efforts to protect the interests of its companies and hope it will maintain a fair and open approach in bilateral economic and trade relations. 

China’s sincerity in promoting economic and trade cooperation with the Netherlands and the huge potential of bilateral cooperation will create broader space for Dutch politicians to display their political wisdom and courage.

Sri Lanka needs cooperation, not conspiracy theories, to resolve debt

Illustration: Chen Xia/Global Times

Illustration: Chen Xia/Global Times

Ahead of Sri Lankan Prime Minister Dinesh Gunawardena’s visit to China, which began on Monday and continues through Saturday, foreign media outlets have again hyped the so-called “debt trap” theory, but such an outrageous lie is not beneficial for the Sri Lankan economy. 

Sri Lanka is now in a critical period of development and economic recovery. What is needed is an effective means to strengthen cooperation with its partners, including China, rather than promoting conspiracy theories.

According to AFP, the IMF has urged a speeding up of negotiations to ensure the debt sustainability of Sri Lanka. 

IMF mission chief for Sri Lanka Peter Breuer said last week that “we look to see swift progress … (in) reaching agreement with the commercial creditors, the international bondholders, and also China Development Bank,” the report said. 

Some foreign media outlets took the chance to again hype the “debt trap” theory in order to discredit China and try to drive a wedge to disrupt economic cooperation between China and Sri Lanka.

It should be noted that China has been doing what it can to help Sri Lanka restructure its debt. Chinese Foreign Ministry spokesperson Wang Wenbin said in October 2023 that China is ready to work with relevant countries and international financial institutions to jointly play a positive role in helping Sri Lanka navigate the situation, ease its debt burden and achieve sustainable development. 

China has also called on multilateral institutions and commercial creditors to take part in Sri Lanka’s debt restructuring based on fair burden-sharing. 

There has been a lot of discussion worldwide over Sri Lanka’s debt restructuring, but less attention has been paid to the nation’s economic recovery. Breuer said last week that Sri Lanka’s economic situation is “gradually improving.” 

It’s particularly noteworthy that growth turned positive after six consecutive quarters of contraction, with an expansion of 1.6 percent year-on-year in the third quarter of 2023 and 4.5 percent in the fourth quarter.

Sri Lanka is emerging from an unprecedented economic crisis that imposed significant hardships on its people in recent years. 

China and Sri Lanka share great potential for cooperation in the fields of trade, investment and tourism, which will foster a rapid and sustainable recovery in the Sri Lankan economy. 

Deepening cooperation means China will buy more Sri Lankan black tea, sapphire, spices and garments, and send many tourists to the island country. New momentum will be given to Sri Lanka’s economy.

There is great potential for cooperation related to the Colombo Port City in Sri Lanka. The Port City was designed as a financial, residential and entertainment hub in the Indian Ocean region. 

Citing Price Waterhouse Coopers Consulting, the Xinhua News Agency has reported that the project will attract more than $9.7 billion in foreign direct investment for Sri Lanka during its development and operation, generate more than $5 billion in fiscal revenue, and create more than 400,000 quality jobs for the locals.

The US announced a $553 million project in 2023 to build a deep-water container terminal in Sri Lanka’s Port of Colombo as it competes with China in international development financing, the Associated Press reported. 

Sri Lanka has a favorable geographical location and advantageous natural conditions. Therefore, the island country should make full use of its geographical advantages to boost trade and attract foreign investment.

From this perspective, what is crucial now is to transform its advantages into a driving force for sustainable economic growth. If Sri Lanka makes good efforts in this regard, promoting sustainable economic development, increasing employment and improving tax revenues, then its debt pressure will be greatly alleviated.

The author is a reporter with the Global Times. [email protected]