Eight-Dimensional Analysis of the Chinese Economy in 2021
by Qi Zhenhong
Chinese Ambassador to Sri Lanka
The year 2021 marked the 100th anniversary of the founding of the Communist Party of China (CPC). The COVID-19 pandemic continuedto spreadworldwideand the global economic growth lacked momentum. Against this backdrop, the CPC has rallied and led the Chinese people to fight their way; the Chinese economy has been on a steady recovery and development path and handed over a dazzling ‘transcript’, fully demonstrating its extraordinary resilience and vitality and injecting much-needed impetus into global economic recovery, which was highlighted byeight dimensions:
First, world’s leading economic growth was sustained. The gross domestic product (GDP) reached114.367 trillion yuan (about USD 17.7 trillion), registering a year-on-year growth of 8.1%, still at the forefront of major economies. Equilibrium in the balance of payments was basically realized, and foreign exchange reserves maintained above USD 3.2 trillion for eight consecutive months, with a balance of USD 3.25 trillion at the end of the year, ranking first in the world steadily.
Second, new jobs in urban areas continued to expand. The newly increased employed in urban areas totaled 12.69 million andthe surveyed unemployment rate averaged 5.1%, 0.5% lower than that of the previous year.
Third, consumer price was kept within a reasonable range. Efforts to ensure supply and stabilize prices continued to be intensified and the supply of basic living necessities increased. The Consumer Price Index (CPI) went up moderately by 0.9%.
Fourth, foreign trade and foreign investment utilization grew rapidly. The annual trade value of goods surpassed the USD 6 trillion mark for the first time (USD 6.05 trillion, up by 30%), ranking first worldwide for the fifth year running. Foreign investment in actual use hit a record high of 1.15 trillion yuan (USD 173.48 billion, up by 20.2% ).
Fifth, another bumper grain harvest was secured. The total output of grain was 682.85 million tons, a new high. It has maintained above 600 million tons for seven consecutive years, laying a solid foundation for ensuring market supply and stabilizing prices.
Sixth, new industries and new forms of business thrived. The value added of high-tech manufacturing went up by 18.2% year on year. The new generation of information technology accelerated its penetration and integration into new consumption areas such as online shopping, mobile payment, and online-to-offline commerce.
Seventh, people’s livelihood was strongly and effectively safeguarded. The growth of residents’ income wasbasically in line with national economic growth and poverty alleviation outcomes have been consolidated and expanded.Investment toimprove people’s livelihood has continued to increase, withthat in the education and health sector up by 11.7% and 24.5% respectivelyover the previous year.
Eighth, China’s contribution to the world economy expanded. According to the International Monetary Fund (IMF), China is expected to account for about 18% of the global economy in 2021, representing a steady increase in successive years. China has become the world’s second largest consumer market, with imports of goods and services worth USD 2,687.5 billion and USD 427 billion respectively in 2021.The annual outward foreign direct investment was 936.69 billion yuan (USD 145.2 billion, up by 9.2%), 14.8%of which flowed into countries along the routes of the Belt and Road Initiative. So far, China has signed 19 free trade agreements with 26countries and regions. In particular, the Regional Comprehensive Economic Partnership (RCEP) Agreement entered into force on 1January 2022, paving the way for the creation of the world’s largest free trade area, in terms of population, GDP and trade value, with the greatestdevelopment potential. Meanwhile, China is positively engaged in multilateral economic cooperation mechanisms such as the World Trade Organization (WTO), IMF, Asia-Pacific Economic Cooperation (APEC), Shanghai Cooperation Organization (SCO), G20, etc., contributing a lot to improving global economic governance and promoting economic globalization.
The world economy is recovering from the troughs, but the global industrial and supply chains have been disrupted; commodities prices continue to rise; energy supply remains tight. These risks compound one another and heighten the uncertainty about economic recovery. The Chinese economy is also faced withvarious challenges, but its fundamentals characterized by strong resilience, enormous potential and long-term sustainability, remain unchanged. China is striving to build a new development pattern with the domestic market as the mainstay and the domestic and international markets (dual circulation) reinforcing each other, indicating brighter prospects for the Chinese economy, which will continue to serve as a strong engine for global economic recovery.
“China will do well only when the world does well, and vice versa”. China will continue to expand high-standard opening-up and further integrate into the regional and global economy. China will work together with all countries including Sri Lanka in promoting high-quality Belt and Road cooperation, making the pie of the global market even bigger, strengthening the mechanisms for sharing benefits globally and exploring new ways of international cooperation, to achieve mutual benefit and win-win results and promote the world economy to head for a spring full of vitality.