China News Service:

According to the general market forecast, the external environment will possibly be more challenging in 2019, and several international institutions have downgraded their expectations on China's economic growth. Therefore, Mr. Ning, what will be the economic trajectory in 2019, and is it possible there will be a crescendo by the end of the year following moderating or even slow growth at the beginning?

Ning Jizhe: 

The economic future of China and, indeed, the world, has drawn immense concern since 2019 arrived. Certainly, we have noted the fact of international institutions lowering their expectations for the global economy, including China as well as developed countries.

Regarding China's economy, the external environment is becoming more complex and challenging, filled with instabilities and uncertainties. Trade protectionism is still prevailing, along with unilateral protectionism and populism. More to the point, the structural problems are still prominent. However, despite various disputes, troubles, problems, challenges and even outright crises, there remain hope, opportunities and the conviction of a bright future. In 2019, we have got to be aware that opportunities form a symbiosis with challenges, especially as the economy is still forging ahead with moderate growth. Therefore, given its fundamental nature and conditions, we are convinced the economy can still perform within a reasonable range to secure constant and sound development. Amid a flagging global economy, China remains the biggest contributor to economic growth. Therefore, the fluctuations, either monthly or quarterly, are nothing abnormal and we should not be overly concerned. Our attention should be focused on key factors, such as yearly performance, the movement and tendencies in the global tide. On the whole, the world is still dominated by economic globalization, digitalized social networks, multilateral politics and cultural diversity. We have reached consensus that multilateralism, peace, development and cooperation remain mainstream conceptions globally.

As for China, the country is still and will continue to be in an important period of strategic opportunity for development. The economic fundamentals sustaining sound development remain unchanged, and will never change. The fact that China remains in the primary stage of socialism has not changed, and its international status as the largest developing country in the world is also, by no means, going to change. This means we still have an advantage of backwardness and substantial potential. In particular, the 19th National Congress of the Communist Party of China made a major decision to resolve the issue of imbalanced and inadequate development. The decision will certainly promote the country's high-quality development and ensure the economy maintains a medium-high growth rate.

There are many favorable conditions. First, tremendous changes in the world and a new development pattern emerging in China have brought about significant opportunities. There is enormous space for China to enhance openness towards and cooperation with other countries, and to participate in the reform of the global economic governance system. Meanwhile, we are speeding up economic structural upgrading, improving technological and innovation capacities, furthering reforms and opening wider to the outside world, as well as accelerating green development. All those efforts mean fresh development opportunities.

Second, China is among the most promising markets in the world. As was mentioned just now, our population is approaching 1.4 billion. China has the world's largest and fastest-growing middle-income population. According to internal measurement by the NBS, China had more than 400 million middle-income earners in 2017, and the measurement for 2018 is expected to see a higher number. There is a standard for the middle-income group. China has about 140 million households with an annual income of 100,000 to 500,000 yuan. Those 400 million people can afford cars, housing, tourism and entertainment. Therefore, consumption offers strong support for China's sustained and steady economic growth. Apart from the 400 million middle-income group, we have a large number of people in other income groups, including the high-income and the lower-middle-income. By increasing residents' income, improving the consumption environment and product quality, China is going to create a stronger domestic market and further unlock the huge consumption potential.

Third, China boasts substantial material and talent bases. After more than four decades of reform and opening up, China has established a relatively complete and comprehensive industrial system, and has been constantly improving its infrastructure, thus laying a sound material and technological foundation for economic growth. A great deal of attention is now being paid to labor, an active factor of production. China has a labor force of nearly 900 million, of which 700 million are employed people and 170 million are high-quality talents who have received higher or vocational education. More than 8 million students graduate from universities each year. With a huge population and labor force, China will continue to benefit from the demographic dividend, a rising labor participation rate and the emerging talent dividend. All those factors provide intellectual support for promoting high-quality development and opening up new growth horizons.

Fourth, the release of the reform dividend accelerated. Last year marked the 40th anniversary of reform and opening up policy; this year sees the 70th anniversary of the founding of New China. Thus, the reform was, is and will continue to be a strong driving force for China's economic development.

Fifth, macro policy has large room for maneuver and gained sufficient experience. At present, the inflation level and fiscal deficit rate are relatively low even by international standards, the foreign exchange reserves are sufficient, and macroeconomic policy has great room for a continued good operation. In this regard, we should strengthen countercyclical adjustment and implement active fiscal policies and prudent monetary policies. Active fiscal policies should be strengthened to achieve greater effect, and sound monetary policies should be maintained at a certain moderate level, coordinated with the implementation of other policies. We have enough adjustment tools and available approaches, and we have a wealth of experience. You can look back at how we responded to the Asian financial crisis 20 years ago. You can also look back at how we responded to the international financial crisis 10 years ago. Despite the challenges and changes taking place in the world, we have hard-working and intelligent people, we have strong leaders, and we have rich and diverse experience, so we will be able to turn crises into opportunities, seize opportunities, overcome challenges, reverse downward pressure to lifting force, promote economic to advance in stability, and strive for high-quality development.

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