Hu Angang, a noted economist and Director of the Center for China Studies, Tsinghua University wrote up to the leading Chinese newspaper “People’s Daily”, highlighting ten exciting developments in China’s economy in 2016.
1. Economic growth: realizing GDP growth target by 2020 ahead of schedule
China’s economy has been operating steadily in 2016, with the GDP growth expected to hit about 6.7 percent, the same as anticipated at the beginning of the year.
China’s 2016 GDP is 4.22 times that of 2000, fulfilling four years ahead of time the target of quadrupling the 2000 GDP by 2020 as was put forward by the Party’s 16th National Congress. The per capita GDP is also expected to be over four times that of 2000, fulfilling three years ahead of time the target of quadrupling the 2000 per capita GDP by 2020 as was put forward by the Party’s 17th National Congress.
This has laid a good foundation for fulfilling the GDP and urban and rural per capita income targets of quadrupling those of 2010, thus putting two safeguards to the task of completing the building of a well-off society.
2. Structural upgrading: transition to post-industrial era
China’s economy is undergoing a major change from the industry-dominated era to service-dominated era or the post-industrial era.
At the same time, China’s industrial structure is undergoing optimization and upgrading, with the high-tech industry and equipment manufacturing outpacing the general industries.
The bright spot in the structural upgrading in 2016 is marked by the major achievements China has made in its solid steps in the reform of the supply-side structural reform. It indicates that the dynamics of growth is changing from the old to the new.
3. Consumption: second largest consumer goods market in the world
Consumption has become the biggest driving force behind the economic growth. The ultimate consumption spending rose to make up about 55 percent of the GDP in the first three quarters of 2016 and its contribution to GDP growth rose from 66.4 percent in 2015 to 71 percent.
Consumption can be termed as the “ballast” of China’s economy, which has a more significant effect on pulling the economic growth. It also indicates that the economic growth has had a stronger effect on improving the livelihood of the people. China’s economic growth is changing from a mode driven dominantly by investment to a mode driven mainly by consumption.
4. New economy: dividends from the world’s largest digital population
2016 has witnessed a rapid development of new economy and new businesses.
China has already become No. 1 in the world in terms of the number of Internet users or mobile phone users, thus creating huge dividends from the large digital population.
5. Innovation: a country with the largest number of patent licensing
In 2015, China jumped to the first place in the world in the number of creation patent applications and creation patent authorization. In the first seven months of 2016, the number of authorized creation patents increased by 49.5 percent and it may well top 500,000 to become the first country whose creation patent authorization exceeded 500,000 in a single year.
China’s innovative development is stimulating the processes of the world’s economic innovation and new science and technology revolution.
6. Employment: world-leading new job increase and the largest number of market entities
In the first three quarters of 2016, 10.67 million people were employed in cities and towns and the number may top 13 million in the whole year, far outstripping the anticipated target. It is a record when the economy grows at a medium-high level.
2016 witnessed a vigorous development of startups in China. In the first three quarters of 2016, the country registered more than 40,000 new market players a day. Now the total number of market players has reached 80 million, more than the total population of Germany, the United States, EU and Japan. In the first three quarters of 2016, China registered 14,600 new market players a day. China will become the world’s largest “Kingdom of entrepreneurs”, who are both market players and major employers.
7. Poverty reduction: fast rise in per capita income
With the steady development of the economy, the living standards and quality have been rising. The per capita disposable income in both urban and rural areas has increased steadily in 2016, rising by 5.7 percent and 6.5 percent, respectively, in real terms, becoming the fastest growth in the world. The per capita disposable income increased faster than that of urban areas, thus narrowing the urban-rural gap down to about 2.8 times.
8. Environmental protection: green dev. accelerated & environment quality improved
In the first three quarters of 2016, the energy consumption of unit GDP dropped by 5.2 percent year-on-year and the carbon emission per unit GDP dropped by 6 percent year-on-year, both fulfilling the year’s bounded target. The major pollutants emission has continually been reduced. It is expected that the four major pollutants (COD, ammonia nitrogen, SO2, and NOx) are expected to outshoot the annual bounded targets.
2016 has witnessed the steady reduction in resources consumption, environmental pollution and ecological cost and the rise in economic development quality and ecological efficiency, creating a favorable condition for realizing the 2020 targets for improving the quality of ecology and environment.
9. “Going global”: investing overseas for benefits of the other parts of the world
2016 has seen rapid growth in China’s outbound investment. In the first three quarters, China attracted foreign direct investment (FDI) amounting to 95.09 billion U.S. dollars and its outbound direct investment (ODI) reached 134.22 billion U.S. dollars, up 53.7 percent from a year ago.
Chinese enterprises’ overseas M&A activities can be found in 160 countries and regions. Their overseas acquisition transactions reached 67.44 billion U.S. dollars, involving 18 industries in 67 countries and regions.
China has become one of the biggest investors in the world, which has created enormous wealth and job opportunities for other countries.
10. Global governance: providing “China plan” for the world economic development
2016 is a year in which China has participated in the global economic governance. China has both used its own development to push forward the world economy and provided “China Plan” for building an innovative, dynamic, inter-linked and inclusive world economy.
China’s contribution to the world economic growth in 2016 is expected to top 30 percent, continuing to act as the world’s biggest growth engine and backbone to sustain the growth of the world economy.
What is more important is that China hosted the G20 Hangzhou Summit against the backdrop of trade protectionism and counter-globalization trend. On a number of international occasions, China put forward its recommendations and plans of action and in particular, it promoted formulation of the “G20 Strategy for Global Trade Growth” and G20 Guiding Principles for Global Investment Policymaking to promote global trade and investment liberalization, facilitation of services, help define the direction of the world economic development and offer advice and recommendations for the world economic recovery.
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