Several authoritative international institutions have one after another changed tack and become optimistic about China's economy. Following the International Monetary Fund (IMF), Asian Development Bank (ADB) and Asia-Pacific Economic Cooperation (APEC), the World Bank yesterday also upgraded its forecast for China's economic growth this year to 6.7 per cent from 6.5 per cent. This shows China's innovative development gradually pays off, keeping generating new energy for growth. This also gives confidence to the world that China continues to be a source of driving forces and stability for the world economy.
As a matter of fact, international institutions turning to becoming more optimistic with one accord about the China's economic outlook exactly gives approval for the results of China's economic restructuring, and deals a vigorous counter-blow to the earlier moves by the Standard & Poor's (S&P) and Moody's to downgrade the credit rankings of the Mainland and Hong Kong. Such moves highlight the fact that Western rating agencies unjustifiably bad-mouth China which costs them their creditability.
At present China's optimising its economic structure and quality of growth have achieved substantial results, with consumption and services having become an important engine to pull forward economic growth. Consumption's contribution to economic growth exceeded 60 per cent in the first half of this year, and services weighed more than half of the economy. This strengthens the stability and sustainability of economic growth, which is one of the key factors for the Chinese economy to maintain stable performance with good momentum for growth.
What is more gratifying is that China's innovative development is more effective than expected. The policy introduced years ago to "encourage people to do business creatively and drive innovation" has already taken certain effect in promoting economic growth. China took an early start in innovative development right when a new industrial revolution revolution centring on networking, digitalisation and intellectualisation was just around the corner.
As EU and US's restrictions on export of high-tech products to China are in place, China rather turns to concentrating its efforts on developing innovation and technology on its own, and now its development in fields such as artificial intelligence (AI) and robotology reaches quite a high level. It may be said that China's momentum in developing innovation and technology now cannot be stopped by any force.
In fact, China's ranking in the Global Innovation Index (GII) rises to the 22nd place, leading other middle-income economies. At the same time the number of Chinese "unicorn" companies (start-up companies valued at over US$1 billion and not publicly listed) increases remarkably. This shows China's capability in innovation keeps improving and gradually achieves results.
By end of June this year, there were about 250 "unicorn" companies globally, of which US companies took the largest share - accounting for 42 per cent of the total. China was on the second place, accounting for 38 per cent. This indicates that the difference between the two countries in the number of "unicorn" companies is being narrowed, and there are conditions for China to catch up from behind.
Actually, the fast rise of new economy in China is obvious to everyone, with the emergence of new industries such as e-commerce and mobile payment. In particular, China's mobile payment leads the world. Last year, mobile payment in China reached as high as US$5.5 trillion, which the US cannot hold a candle to.
Noticeably, China's strategy to push forward innovative development not only injects a new driving force into economic development but also promotes the upgrading and restructuring of manufacturing industry. Pushed by the "Made in China 2025" strategy, high-tech and equipment manufacturing industries have entered the stage of fast development. In the first eight months of this year, investment in high-tech manufacturing increased by nearly 20 per cent from a year ago, being at the level of high growth. So much so that there now is a great longing for [the future of] China's intelligent manufacturing.
Given that the manufacturing index in September reached five-year high, China's economic growth in the third quarter can be expected to carry on the good momentum in the first half of the year of making progress while ensuring stability and to achieve middle- and high-speed growth in consecutive nine quarters. Speculators short-selling China eventually will just beat the air and end in failure.
05 October 2017
