SCIO briefing on China's economic performance in H1 2021
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E-mail China.org.cn, July 22, 2021
Hong Kong Economic Herald:
The World Bank expects China's economy to grow by 5.4% next year, returning to its long-term trend before the COVID-19 epidemic. Mr. Yao and Mr. Xu, how do you see China's economic forecast next year? Thank you.
Xu Xianchun:
The World Bank predicted that China's economy will grow by 5.4% next year. The World Bank is an important international institution, its forecasts are closely watched, and we often follow its predictions as well. Nonetheless, its forecasts are often revised. When the NBS issues new data, the World Bank may adjust its projections.
How should the World Bank's prediction of 5.4% economic growth in 2022 be viewed? I agree with Mr. Yao's comments just now that China will not maintain a very high growth rate as China's GDP gradually increases. For example, China's GDP was around 10 trillion yuan in 2000, while the number exceeded the 100 trillion yuan threshold in 2020, which is 10 times higher than 20 years ago, or more than six times that in 2000 when the price factor is excluded. What does this mean? It means that one percentage point increase now is equivalent to growth of six percentage points in 2000. Therefore, we cannot count on GDP continuing at such a high speed. The CPC Central Committee and the State Council have attached high importance to high-quality economic growth, and China is shifting from high-speed growth to high-quality development. We need a certain growth rate as development is the foundation for and the key to addressing almost every problem. Economic growth is an important part of development, but instead of blindly pursuing growth rate we need high-quality development.
Looking back over the previous economic growth data: China's economic growth rate reached a peak of 14.2% in 2007; the figure was 10.6% in 2010, 6% in 2019 and last year saw a 2.3% growth due to the pandemic. Obviously, China's growth rate is gradually dropping, which I believe is quite normal. China's economy has expanded remarkably after a long period of acceleration, and one percentage point growth now is not the same as it was before. In addition, we are pursuing high-quality development. I think China's potential growth rate is between 5.5% and 6%, and it is normal for our GDP to be within this range. Over time, economic growth may decrease, but we should not be surprised at this and should be confident in achieving our future targets as long as the data is controlled within a reasonable range and we adhere to high-quality development. Thank you.
Yao Jingyuan:
I'd like to add something. I have an example to explain that different economic phases should match with different growth rates: My family welcomed in a baby granddaughter, weighing 3 kg. After a month she had reached 4.5 kg, which the doctor said was normal. However, I questioned that figure because she is just a baby and gained 50% of her weight in a single month. If we as adults, gained 50% of our weight in one month, then we should definitely go see a doctor. As such, we should understand that different growth stages face different health indexes. What Mr. Xu Xianchun said just now is quite clear: that it was reasonable to reach a high-speed growth rate in the past as we faced problems such as poverty, and a lack of food and clothing. Now we have realized our first centenary goal and are marching toward the second centenary goal, amid which China's economy has shifted from high-growth to high-quality development. Just like my granddaughter is growing up and we need to pay more attention to her studies and her ethics and morals. So, I want to say that we shouldn't be too sensitive about the speed of economic growth, whether it is an average of 4.7% in the coming 15 years, exceeds 6% or even drops below 4% in certain years. In general, the quality of growth will determine whether we can reach our second centenary goal.
Xing Huina:
One hour has now passed, but we still have two journalists with their hands raised. We'll spend the last 10 minutes to give each journalist the opportunity to ask their questions.
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