Analysts and experts have over blown the fears related to its economic slowdown, is the message that China is attempting to deliver at the World Economic Forum at Davos.
The Chinese economy is making substantial growth, and it is crucial for China to focus on the long term, said Vice President Wang Qishan in a speech in Davos.
“There will be a lot of uncertainties in 2019, but something that is certain is that China’s growth will continue and will be sustainable,” he said.
China has reported a growth rate of 6.6 per cent for 2018 which is the slowest for the economy in almost three decades.
Economic activity has slowed down by the efforts of the Chinese government to bring down the high levels of debt so that the second largest economy of the world finds a steady and stable footing. The economy is also feeling the pinch of the trade war with the United States because of higher import tariffs in the US on Chinese goods worth billions of dollars.
A glass-half-full view of the data was taken by Wang.
“I think [6.6%] is a pretty significant number,” he said. “Not low. At all.”
The Communist Party is “trying to remind people that speed does matter, but what really matters for the time being is the quality and efficiency” of development, Wang said.
This sentiment has been repeatedly echoed by Chinese officials this week.
Growth as low as 6% would not be “a disaster”, said Fang Xinghai, vice chairman of the China Securities Regulatory Commission, at a panel on Tuesday.
Despite this, the markets have been rattled by rising concerns about the slowdown in China and its possible impact on global growth in general.
Since the global financial crisis, this is the most difficult economic situation being faced by China, said Chen Xingdong, chief China economist at BNP Paribas.
“Growth is slowing down quite dramatically,” Chen told reporters. “The magnitude of the slowdown has been intensifying.”
A mixture of looser monetary policy and fiscal stimulus such as tax cuts for small businesses have been utilised by China to support growth in its economy.
There are however also some bright spots. According to a report published Wednesday by research firm eMarketer, 2019 will see retail sales in China touching a figure of more than $5.6 trillion which would be about $100 billion more than in the United States.
But there is a looming threat of tougher trade penalties.
On the other hand, negotiations on trade are being held between China and the United States to ultimately arrive at a trade deal before March 1 when the Trump administration is slated to be imposed enhanced tariffs on $200 billion worth of Chinese goods when the current rate of tariffs would be increased from 25 per cent to 40 per cent.
While offering an olive branch, Wang seemed to take a jab at the Trump administration.
“Shifting blame for one’s own problems onto others will not resolve the problems,” he said in prepared remarks.
(Adapted from CNN.com)