For those who had doubts about China’s future path for whatever reason, nothing was more reassuring than hearing Premier Li Qiang’s unequivocal reaffirmation during a news conference after his premiership was endorsed by the National People’s Congress that China will continue to follow the path of reform and opening-up in pursuing Chinese-style modernization and the nation’s second-centenary goal, noting that reform and opening-up is a crucial strategy that determines the destiny of modern China. Indeed, the achievements the country attained against all odds in the past five years have helped to strengthen both the leadership and people’s confidence in the chosen path.
In the past five years, the country ran into the most daunting threats and challenges since the reform and opening-up process started more than 40 years ago. Ever since Washington launched a trade war against China in 2018, China has been increasingly subject to suppression, sanctions and full-scale besiegement by the US-led West. The Russia-Ukraine conflict has sent shock waves round the world, aggravating bloc confrontation and deglobalization. While struggling with an external environment fraught with “high winds, choppy waters”, the country’s economy has also been battered by the COVID-19 pandemic, especially in the second half of 2022. Moreover, China’s development model has been gradually shifting from medium-high growth to high-quality development over the past five years. This shift in the development model has also brought difficulties and challenges.
The adversity, however, did not stop the country from pushing ahead and making achievements beyond the expectations of many, notably in the following areas:
In the past five years, the average annual growth rate of China’s economy was 5.2 percent. While this figure seemed not to be high compared with the 7.1 percent for the five years to 2018, it was still nearly double that of other major economies in the world. China’s GDP reached 121 trillion yuan ($17.52 trillion) in 2022, accounting for more than 18 percent of global GDP.
Meanwhile, Shenzhen managed to surpass Hong Kong in terms of economic aggregate in 2018, and Fujian province also overtook Taiwan in terms of GDP in 2022.
In the past five years, China contributed more than 30 percent of the global economic growth, transforming itself from an important growth engine to a key driver of the global economy. That China maintained an average growth of 5.2 percent in the past five years was significant to the global economy. Given the strong economic ties between Hong Kong and the mainland, the latter’s relatively strong growth has also helped significantly boost Hong Kong’s economy. Without the driving effect of the mainland economy, Hong Kong’s economic situation in the past few years could have been much worse.
Over the past five years, China’s spending on research and development has increased from 2.1 percent to more than 2.5 percent, with the contribution rate of scientific and technological progress rising to more than 60 percent.
This period is said to be one of “exponential growth” in technological advancement after recognizing the imperative to achieve technological self-reliance.Although “independent innovation” had repeatedly been emphasized previously, technology firms lack the incentive to achieve self-reliance as advanced technologies could be procured from developed markets. However, after the US decided to suppress Chinese tech giants such as Huawei, ZTE and Semiconductor Manufacturing International Corp as part of its technological blockade against China, the Chinese people have realized that no one but themselves can be relied on in developing the core technologies.
In the past five years, the central government doubled down on its investment in scientific and technological innovation to support basic research and applied basic research, with funding for national basic research doubled in five years. At the same time, investments in chips, high-end equipment, artificial intelligence, biomedicine, new-energy vehicles, photovoltaics, wind power, etc, were also given a boost. These endeavors are gradually bearing fruit.
In the past five years, the central government has made numerous efforts to bolster China’s economy, including streamlining administration and supervision, delegating regulatory power, lowering entry barriers, introducing innovative systems of supervision, promoting fair competition, and optimizing services with the aim of creating a business-friendly environment. These have helped rectify the previous issues of excessive bureaucracy, insufficient supervision and inefficient services. According to the World Bank’s “Doing Business” report, China’s ease of doing business ranking has continued to rise over the years, from 78th in 2017, to 46th in 2018 and 31st in 2020.
In order to alleviate the financial burden of enterprises, the central government has significantly cut tax and fees over the past five years. Tax cuts totaled 5.4 trillion yuan and fee reductions totaled 2.8 trillion yuan over the past five years, aside from various measures to facilitate financing for enterprises. Total outstanding loans of the manufacturing sector have increased from 16.3 trillion yuan to 27.4 trillion yuan over the past five years; the outstanding balance of inclusive loans granted to micro and small enterprises has surged from 8.2 trillion yuan to 23.8 trillion yuan, with the average loan interest rate falling by 1.5 percentage points.
The real economy is the foundation of the country and brooks no instability.Despite the onslaught of the COVID-19 pandemic and other difficulties, the central government managed to keep the country’s economic foundation in relatively good shape with pragmatic policies and measures.
President Xi Jinping has repeatedly said that China will not close its door to the world; it will only become more and more open. Indeed, the central authorities have put Xi’s words into practice in multiple ways in the past few years, including promulgating the Regulation for Implementing the Foreign Investment Law, establishing 21 free trade zones across the country, and reducing the negative lists for foreign investment access to China and in free trade zones by 51 percent and 72 percent respectively.
The more the West is trying to suppress and block China’s rise, the more determined China is in pushing ahead with its opening-up. Despite all the hype of decoupling peddled by the West, the amount of foreign capital entering China is on the rise, which validates the effectiveness of the country’s pragmatic policies. In 2022, China’s total value of imports and exports exceeded $6 trillion, and the actual use of foreign capital reached $189.13 billion, a record high.
People’s living standards
The central government has made tremendous efforts to improve citizens’ livelihoods in the past five years. Having lifted about 800 million people out of extreme poverty over the last few decades, the central government has remarkably resolved the problem of abject poverty. The number of people covered by basic pension insurance has increased by 140 million to reach 1.05 billion in the past five years; citizens’ income basically grows in sync with the country’s economic development. Over the years, more than 42 million sheds have been renovated or rebuilt in the shanty towns, and hundreds of millions of people living in sheds have since moved into apartments with decent living conditions.
The author is a Hong Kong member of the National Committee of the Chinese People’s Political Consultative Conference and chairman of the Hong Kong New Era Development Thinktank.
The views do not necessarily reflect those of China Daily.
HONG KONG NEWS