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China's Economy Growing amid Restructuring
An article contributed by Ambassador Luo Zhaohui to The Hill Times
2016/05/06

The 4 May 2016 issue of The Hill Times publishes an article of Chinese Ambassador Luo Zhaohui. In his article, the ambassador gives an update on China's economic situation, and emphasises that China's economy will maintain a long-term steady growth amid restructuring. China's growth will bring opportunities for trade and economic cooperation between China and Canada. The following is the full text of the article:

Given the sluggish growth of the global economy, the economic growth of China, the world's second largest economy, is very much in the international spotlight.

According to statistics released by China's National Bureau of Statistics a few days ago, China's gross domestic product grew 6.7 per cent year-on-year in the first quarter of this year, slightly lower than last year's average of 6.9 per cent, but within the 6.5 per cent to seven per cent target range for growth aimed by the Chinese government. China's economic growth remains one of the highest compared to the developed economies and other emerging economies, maintaining a medium-high speed.

The positive changes in China's major economic indicators, such as production, demand, prices, and volume of physical goods, demonstrate that the country's economic performance in the first quarter was better than expected.

China's employment rate is stable and increasing, with new jobs created in the first quarter already meeting 31.8 percent of the annual target. The economic structure is improving and the economy is developing rapidly with new driving forces for growth gaining momentum.

China's new strategic industries have grown 10 per cent and its high-tech industries expanded 9.2 per cent. Consumption keeps going strong, with increased household spending on housing, transportation, education, old-age care, social security, health care, and tourism. Medium- to high-end consumption is booming.

China's imports and exports are gradually picking up, especially its exports, which have stopped falling and are starting to rise again. All this has laid down a solid foundation for economic growth throughout the year.

In April, while downgrading its global economic growth outlook by 0.2 percentage points and cutting its forecast for growth prospects of the United States and euro area by 0.2 percentage points, the International Monetary Fund upgraded China's economic growth outlook by 0.2 percentage points. Similarly, JP Morgan, Credit Suisse, Goldman Sachs, HSBC, and other financial institutions have also raised China's economic growth forecast. This is a strong indication that the international community is optimistic about China's economic development.

As the Chinese economy grows in size, it would be unrealistic and irrational always to maintain the double-digit growth taken for granted in previous years. China's GDP totalled more than US$10 trillion in 2015. A mere one per cent growth today is equal to 2.5 per cent 10 years ago. China's current annual GDP increment in absolute terms is almost the size of a medium-sized economy.

China's GDP amounted to 15,852.6 billion yuan (about US$2,443.3 billion) in the first quarter of 2016. Calculated at 2015 prices, the first-quarter GDP rose by 985.1 billion yuan (about US$151.8 billion) year-on-year, 22.2 billion yuan (about US$3.42 billion) more over the same period of last year. The rate of China's GDP growth may be lower than before, but the real growth is more substantial and bigger in size than in the past.

China's economy is now at a critical juncture of transformation, and is going through a transition shifting from traditional drivers of growth to new ones. The economy is also grappling with the throes of structural adjustment and considerable downward pressure. The opportunities are unprecedented, but so are the challenges.

Actions speak louder than words. In the face of these challenges and the complex economic situation, the Chinese government has put forward the concept of innovation-driven, co-ordinated, green, open, and inclusive development. China will improve its policies of macroeconomic regulation and press ahead with supplyside structural reform.

China will vigorously implement the strategy of innovation-driven growth and promote industrial innovation and upgrading. China will cut overcapacity and excess inventory, deleverage, reduce costs, and strengthen weak links in development so as to improve the quality and efficiency of economic development, and strengthen economic sustainability.

According to the latest IMF World Economic Outlook, China is navigating a momentous but complex transition toward more sustainable growth based on consumption and services. Ultimately, that process will benefit both China and the world.

China remains the world's most important engine for global growth, contributing up to 25 per cent of the world economic growth. In the next fi ve years, China's economy will continue to grow at a minimum rate of 6.5 per cent. Its imports are expected to reach US$10 trillion and its outbound direct investment will exceed US$600 billion.

China will adhere to the policy of reform and opening up, and promote common development and win-win co-operation with other countries.

China is advancing the Belt and Road initiative (the development of a land-based Silk Road Economic Belt and an oceangoing 21st Century Maritime Silk Road) and developing international production capacity co-operation. The Asian Infrastructure Investment Bank, established at China's initiative, is already up and running. The New Development Bank BRICS has announced its first loan program.

China is Canada's second largest trading partner. China's development will provide opportunities for bilateral trade and economic co-operation. The commonalities between Chinese and Canadian development strategies and the complementarities between our industrial structures promise huge potential for trade and economic co-operation between our two countries.

China is ready to work closely with Canada to promote greater progress in bilateral trade and economic co-operation through, among other things, the negotiation of a free trade agreement at an early date; the development of large projects in high-speed rail, nuclear energy, and liquefied natural gas; the building of a China-Canada maritime energy corridor; and the creation and cultivation of new highlights of co-operation in energy resources, infrastructure development, new manufacturing industries, and the green economy.

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