China-U.S. economic and trade deals account for over two thirds on the list of all 49 dealsPresident Xi Jinping sealed during his U.S. State Visit. Among them are joint-venturedcompany to build a 370-kilometer high-speed rail line linking Southern California to LasVegas, collaboration between Microsoft and Xiaomi to provide “cloud service” forcustomers, construction of a manufacturing base in Massachusetts with $60 millioninvestments from CRRC Co., and so on. As two giant economies, China and the U.S. aretightly connected to each other. The trade and economy on high levels are bringing alongunlimited business opportunities.
There have been doubts about whether Chinese economy would have a so-called “hard-landing”, or whether the fluctuation in Chinese stock market would influence the directionof China’s reform. “China’s economy will stay on a steady course with fairly fast growth”,said President Xi in Seattle. “Opportunities facing the two countries require a deepenedChina-U.S. trade cooperation.” Echoing all these statements made by President Xi in theState Visit, the achievements made during the past week have sent a clear signal: Chinawill stay on its reform track despite the fluctuations in the market. The Chinese economyhas been brought into a new status and will keep the accelerating rate as it steps into ahigher level. The future prospect is still bright.
Let the statistics say. Despite the complexity and volatilities of world economy, Chineseeconomy maintains a 7 percent growth rate in the first half of this year, which is one of thehighest in the world.
In the first six months of this year, 7.18 million new jobs have been created in cities andtowns, achieving 71.8 percent of the annual goal. The average income rate has grown by7.6 percent year on year. The two core indices of employment and income have shown thesteady growth of Chinese economy.
In the past 8 months, China attracts $85.3 billion of foreign direct investment, seeing a 9percent increase year on year. This indicates that foreign investors still hold firmconfidence in Chinese economy. On the other hand, China has invested in 4862 companiesacross 150 countries and regions. These overseas investments accumulate to 473.43 billionChinese Yuan, with an 18.2 percent increase from last year.
The potential of Chinese market is huge with the new industrialization and advancing ITapplication, urbanization and agricultural modernization. Chinese people are becomingmore willing to spend what they have earned through hard work. The middle-class isrising up in China. All of these are the basic facts about Chinese economy.
Time will tell. People know Chinese economy well would see that the current problems arejust temporary in economic transformations. The key to solving these questions is reformand opening-up. The upcoming new round of reform is unprecedentedly comprehensive.The 3rd Plenary Session of 18th CPC Central Committee has set guidance for continuingpolicy reforms. Over 330 points to reform have been raised. The 80 major reform taskshave been mostly finished in 2014. About 70 reform proposals have been raised in the firstsix months of this year, of which the effects will gradually unveil.
We all know it well that the most imperative problem to solve for China is to theimbalanced, uncoordinated, and unsustainable problems emerged in the development. Toevaluate the quality and rewards in Chinese economic growth, strong incentives areneeded.
To reform means to change, and changes are often enshrouded with uncertainty. Worriesover uncertainty keep Chinese people vigilant in its economic development.
China is trying hard to keep the macro economy stable through practical actions. To tacklethe abnormal fluctuations in the stock market, Chinese government curbed the spread ofpanic and thus avoided a systemic risk. China has also finalized the RMB exchange ratequotation mechanism.
Short-term currency fluctuations might occur, but there is no basis for any continueddepreciation. Increasing the intensity of market-determined exchange rate is part of anestablished market-oriented reform. This has nothing to do with a so-called “currencywar”. The speculations of stimulating exports for any so-called “quick fix” are ludicrous.
To drive this train named Chinese economy, we do not need to press the accelerator, or topull the break. Chinese economy will be escalating in a steady way. No nation is isolated inglobalization. Win-win, instead zero-sum game, is the right way for economicdevelopment.
“The interests of China and the United States are deeply interconnected, and we havegreater responsibilities for world peace and human progress,” said President Xi at the jointpress conference with President Obama in Washington, D.C.
President Xi’s statement reveals the logic behind the global economic growth. China has ahuge economic potential, with leeway and internal strength coming at the same time.China is thus fully able to maintain a high level of long-term economic growth, and toprovide a vast market and a solid support for the world economy. An open China willcontinue to draw strength from the developing world, and the development of China willeventually benefit the world.
Translated from Commentary 《中国经济发展前景依然光明》, published on People’s Daily,Sept. 28, 2015