Economic miracle catches the attention of the world

Friday, October 11, 2019

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There was a slogan in the 1950s: “Overtake Great Britain in 15 years and outperform the United States in 50 years”, which referred to China's output of steel which was to have caught up with that of the United Kingdom in 15 years and to have surpassed that of the United States in 50 years.

China actually suffered setbacks because of the hasty approach embodied in that slogan. However, the slogan epitomised the country's desire for strength and prosperity.

In 1952, China's gross domestic product was only 67.9 billion yuan, its GDP per capita was 119 yuan. In 1978, its GDP became the 11th highest in the world, and it jumped to fifth in 2005, surpassing that of France. It overtook the United Kingdom in 2006, and then Germany in 2007, after which it overtook Japan in 2010 to become the world's second-largest economy.

First, there has been a historical leap forward in total economic output and comprehensive national strength.

China's economic scale has constantly expanded over the past 70 years. From being a poor country, China has grown to become the second-largest economy in the world. Especially after the launch of reform and opening-up, China has created a miracle of sustained and rapid economic growth. Since then, China's GDP has increased by 9.4 per cent a year on average. Its total economic output was more than 1 trillion yuan in 1986, more than 2 trillion yuan in 1991, and it exceeded 10 trillion yuan in 2001.

In 2006, the country's total economic output exceeded 20 trillion yuan, more than 30 trillion yuan in 2008, and more than 40 trillion yuan in 2010. In the past three years it has surpassed 70 trillion yuan, 80 trillion yuan and 90 trillion yuan, respectively. Its increased economic output in 2018 alone was equal the total economic output of Australia in 2017.

China's international standing has been prominently upgraded. The proportion of China's GDP in the world's total has grown from 1.8 per cent in the early years of economic reform and opening-up to nearly 16 per cent now. China's contribution to the world's economic growth has surpassed 30 per cent in recent years. Its economic growth rate in 2018 ranked first among the world's five biggest economies, and it continued to be the largest contributor to the world's economic growth.

China has a solid basis laid for development.

Regarding agriculture, China's grain output increased from 113.18 million tons in 1949 to 675.89 million tons in 2018, turning the situation when food supply was at the mercy of the weather to the one when food security can be guaranteed by the country's own efforts.

With regard to industry, China has all the industrial sectors classified by the United Nations, and its output of more than 200 industrial products ranks first in the world. As far as the service industry is concerned, new technologies and new modes have greatly promoted the development of China's service industry and put it at the forefront of e-commerce, data consumption, mobile payments, and other digital services.

Better economic structure has been achieved

China's industrial structure continues to be optimised. Agriculture accounted for a relatively high proportion of the national economy when the People's Republic of China was founded, as manufacturing and the service sector were weak. Dramatic changes have taken place in China's industrial structure over the past seven decades, and it has realised the transformation from being an agriculture-oriented economy to one with coordinated development of the three sectors. The proportion of the primary, secondary and tertiary industries were 7.2 per cent, 40.7 per cent and 52.2 per cent respectively in 2018, with the foundation of agriculture constantly consolidated, manufacturing upgraded and the service sector witnessing rapid development.

The demand structure continues to be improved. China has realised the transition from the constant weakness of demand to the coordinated increase in consumption, investment and net imports. There was not enough money for investment and most people had no money to consume when New China was founded 70 years ago. After the reform and opening-up policy was implemented, investment accelerated but consumption still lagged behind.

Efforts have been made to give full play to the fundamental roles of consumption and investment since the 18th National Congress of the Communist Party of China was convened in 2012. As a result, the contribution of domestic demand to economic growth has constantly increased. The contribution of consumption to the growth of the national economy was 76.2 per cent in 2018.

The regional structure has been optimised. The construction of Beijing Daxing International Airport was recently completed on schedule, which has injected vitality into the coordinated development of Beijing, Tianjin and Hebei province. The Hong Kong-Zhuhai-Macao Bridge reflects the progress in constructing the Guangdong-Hong Kong-Macao Greater Bay Area.

Development was quite unbalanced when New China was founded. With the rapid development of the western and central regions, reinvigoration of the north-eastern region and advanced progress of the eastern region, new growth poles are emerging.

Chinese economy has great potential for further development

Reform adds vitality to the economy. Economic reform has been continuously advanced over the past 70 years, especially since reform and opening-up were introduced to establish and optimise the socialist market economy. The public sector has been consolidated and developed, while the non-public sector has been encouraged, supported and guided, so that the market can play the decisive role in the allocation of resources.

Great efforts have been made to delegate power to lower levels, to improve supervision and provide more efficient services. Reform has been accelerated in the management of State-owned enterprises and State assets since the convening of the 18th Party Congress. Protection of intellectual property rights has been strengthened, financial and taxation reforms have been deepened and agricultural and countryside reforms have been firmly advanced, continuously releasing fresh vitality for economic development.

Opening-up has expanded the space for economic development. From the large-scale introduction of foreign companies to the going-out of Chinese enterprises, and then the forging of cooperation with the Belt and Road Initiative, the breadth and depth of China's opening-up have significantly expanded.

The value of China's total imports and exports of goods reached US$4.6 trillion in 2018, 223 times that in 1978. Both the quality and quantity of foreign investment used have been dramatically improved, and China has become ever more attractive to foreign investors. China's use of non-financial foreign direct investment was US$135 billion in 2018, an increase of 146 times over that in 1983, making it the receiver of the second-largest inflow of foreign investment for two consecutive years. China's non-financial investment overseas was US$120.5 billion in 2018, an increase of 41.3 times over the figure in 2003.

Innovation is the driving force for the economy. The satellite Dongfanghong, space lab Tiangong, China's first domestically built aircraft carrier 001A, and the deep-sea submersible Jiaolong are outstanding examples of China's growing innovation capabilities.

Statistics show that China's total number of researchers ranks first in the world, and China ranked 17th in the global innovation index in 2018. China's total number of patent applications and authorisations is the first in the world. The contribution ratio of innovation to China's economic growth is around 33 per cent. Now innovation has become the primary driving force for China's development.

Surge in entrepreneurship has driven economic growth

Mass entrepreneurship and innovation are strong drivers for the economy. The number of economic entities surpassed 100 million in 2018. In the first half of this year alone, 19,400 new enterprises were established on a daily basis, and the total number of market entities of different kinds was 116 million by the end of June this year.

China has a population of more than 1.3 billion, a labour force of 900 million, and of the total labour force, 170 million have received higher education and have professional skills. China also boasts the world's largest middle-income group. All these facilitate the quality development of China's economy.

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