OPPORTUNITIES AND CHALLENGES FOR CHINA’S ECONOMY
China’s economic trajectory faced several hurdles throughout the year, including a slowing real estate market, growing local government debt and declining market confidence.
Mr Heng highlighted challenges for Chinese leaders.
“China is already the largest trading partner for many countries around the world,” he told audiences on Friday.
“While China’s economy is going through a difficult patch, I trust that China will embark on difficult changes and regain its growth path to generate enough resources to deal with the many challenges it is already facing and will continue to face in the coming years.”
Experts remain cautiously optimistic about the country’s ability to meet its annual GDP growth target of 5 per cent.
Data released on Oct 18 showed that China’s GDP growth slowed in the third quarter, decelerating to 4.6 per cent year-on-year from 4.7 per cent year-on-year. Taking the latest figures into account, China’s GDP growth is now at 4.8 per cent year-on-year, through the first three quarters of the year.
Still, CCIEE’s Mr Bi believes that the annual target of 5 per cent is achievable, though he thinks it may “end up slightly below 5 per cent”.
He emphasised the government’s recent measures to counteract economic pressures, including increased fiscal and monetary policies aimed at boosting consumption and attracting investment.
“The stock and real estate markets are still at a low point, but China’s economy has great potential for growth,” Mr Bi said, pointing to sectors such as green energy and digital innovation as promising drivers.
Professor Liu Yuanchun, president of Shanghai University of Finance and Economics, highlighted the significance of recent policy shifts, which represent more than just short-term stimulus efforts.
“This is not what some people have described as simply flooding the market with liquidity,” Professor Liu clarified. Instead, he said China’s approach is a “cocktail of different approaches” — a blend of short-term demand expansion and structural reform, designed to fundamentally shift behaviour and incentive systems.
“It provides a turning point, and soon everyone will see it,” Professor Liu added, stressing the importance of these comprehensive reforms for stabilising the economy.
Despite the challenges, experts believe opportunities for growth in China remain abundant, particularly in high-tech sectors and infrastructure development.
Professor Liu pointed to a series of initiatives by the Ministry of Finance and the People’s Bank of China as crucial to future growth, especially through the expansion of the government bond market and deeper interest rate liberalisation.
These moves, according to him, are “pivotal for future monetary policy operations and the fiscal policy framework.”
Sharing a similar outlook is Dr Yao Yang, liberal arts chair at Peking University’s China Centre for Economic Research.
He acknowledged that while China’s recent structural adjustments, including efforts to deleverage and address local government debt, have impacted short-term growth, he remains optimistic about the long-term prospects.
“Technological progress in China is still quite fast… I’m still very optimistic about the Chinese economy,” Dr Yao said, underscoring how innovation continues to drive growth.
While achieving the 5 per cent GDP growth target for the year may be difficult, he believes the economy will come close.
One of the most scrutinised sectors of China’s economy in recent years has been the housing market, which has experienced a prolonged downturn though recent indicators suggest the sector may be stabilising.
Dr Yao expressed cautious optimism, noting that the housing market has begun to return to normal. “The housing sector has come back to normality… I now feel more confident that this sector is going to stabilise,” Dr Yao said.
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