SCIO press conference on promoting high-quality development to set the stage for building a modern socialist country in all respects
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E-mail China.org.cn, March 20, 2023
Phoenix TV:
Last year, China's economic growth came in at 3%, while U.S. economic growth reached 2.1%. However, many analyses showed that the increment of the U.S.' GDP was larger than China's, and the gap between China and U.S. in economic aggregate was widening. How do you view these changes? Thank you.
Zhao Chenxin:
Thanks for your question. It's an important question that you have raised. The question also reminds us that many friends may have some questions when looking at the relevant data. I would like to make a few points for your reference regarding your question.
First, I want to stress that China has made remarkable progress in ramping up economic and social development in 2022 despite the impact of multiple unexpected factors. I summed it up in three sentences at the beginning of the conference: the overall performance of China's economy was very impressive, the quality of development has been steadily improved, and the foundation for safe development has been consolidated. Meanwhile, taking multiple economic indicators into overall consideration, the performance of China among the world's major economies was very outstanding. If we look at the longer time span of five or ten years, we can take a comprehensive and in-depth look at last year's achievements. The outstanding comprehensive performance highlights the quality and level of our country's economic development.
Second, when reading and observing economic data, we need to analyze the precise meaning of these data. Last year, China's economic growth came in at 3%, while U.S. economic growth reached 2.1%, and some other major economies grew by around 1.9% or less than 1%. This data was calculated using constant prices, which can reflect the growth of an economy relatively objectively and accurately. However, regarding the comparison of total GDP between China and the U.S., all countries use nominal GDP calculated at the current price of their own currencies when calculating the total GDP, which are prone to be heavily impacted by commodity prices. Last year, the U.S. experienced elevated inflation, with CPI and PPI recording a year-on-year increase of 8% and 16.5%, respectively. However, China's commodities price remained stable last year as CPI and PPI increased by 2% and 4.1% year-on-year, respectively. The high inflation in the U.S. has largely raised the country's nominal GDP. Whether Americas can feel a sense of gain under the high inflation, I assume that the residents of the country have the most experience. The comparison between China-U.S. GDP aggregate should be calculated after adjusting China's GDP from yuan to U.S. dollars, in which the exchange rate plays a significant role in impacting the final numbers. To curb high domestic inflation, the Federal Reserve resorted to seven interest hikes by 425 basis points, raising the federal funds rate to the highest level since 2007, which also caused a passive depreciation of many other currencies. The increase in U.S. dollar interest rates has caused depreciation of other currencies against the U.S. dollar, and the renminbi exchange rate has also been affected to some extent. When considering the gross GDP scale, there has also been a certain degree of reduction. I provide this information for your reference so that you can analyze the precise meaning of economic data when you read and observe it.
Third, China pursues a people-centered approach to development, and the purpose of China's development is to benefit the people. We have always been committed to running our own affairs well, constantly improving and surpassing ourselves to build a better China. We have always been committed to delivering better lives for our people through development and making more and more contributions to world peace and development through China's development. As the world's largest developing country, with a population of more than 1.4 billion, the fact that China has focused on completing its own tasks is a major contribution to human development. We have upheld a mutually beneficial and win-win opening strategy, actively participated in economic globalization, and strived for the common development of all countries. We are willing to make new contributions to world economic development with the new achievements of China's development. We also reach out our arms and welcome other countries aboard the express train of China's development.
Fourth, China's economy is currently operating well on the whole. Many international institutions have recently raised their expectations for China's economic growth. This year is a very important year and the first year to fully implement the guiding principles of the 20th CPC National Congress. Accomplishing the work for economic and social development this year is of major significance. All of us throughout the country have a high degree of agreement on this issue. All regions and all government departments have taken solid, practical, and effective measures. We are confident in achieving this year's targets and advancing the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization. Thank you.
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