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China Aims to Be Driving Force for World Economic Recovery

China is currently striving to become a powerful driving force in the process of recovery of the global economic system.

China Aims to Be Driving Force for World Economic Recovery

The statement about Beijing’s mentioned ambitions was made by Zhao Leji, Chairman of the Standing Committee of the National People’s Congress, on Thursday, March 28, at a plenary session, which is a kind of opening event of the annual gathering of the Boao Asian Forum.

As part of efforts to boost economic development at the global level, China is widely opening its markets to foreign investors. This was stated by Zhao Leji, who is called by many experts one of the main legislators of the Asian country. He also noted that Beijing is taking measures to promote high-quality economic growth.

The mentioned statement of the intentions of the Chinese authorities indicates that the leadership of the Asian country is aware of the need to make changes to the current model of the state’s existence. In this case, the process of functioning of the country is meant primarily in the economic dimension. It is worth noting that many experts talk about the need for Beijing to take more scaleable measures to ensure growth. Alicia Garcia Herrero, a chief Asia-Pacific economist at Natixis SA, believes that to ensure China’s economic development, new solutions are needed to stimulate the corresponding dynamic.

Zhao Leji says that Beijing pays special attention to technological innovation. According to him, China plans to make the mentioned sector a new point of economic growth. He also noted that the Asian country is ready to cooperate with other states in the framework of appropriate efforts.

This month, experts Chang Shu and Eric Zhu said that the Chinese advanced technology sector will become a kind of platform to stimulate the growth of demand for goods and services. In their opinion, by 2026, the mentioned sphere of activity will compete with the real estate area in terms of the scale of impact on the condition of the Asian country’s economic system.

According to economists, last year China’s final demand related to high technology amounted to 18 trillion yuan ($2.5 trillion). This figure is equivalent to about 14.3% of the Asian country’s GDP. Chang Shu and Eric Zhu expect the mentioned indicator to grow to about 19% of GDP by 2026. It is known that approximately 25% of the demand in the Chinese high-tech area is related to spillovers to other sectors.

Zhao Leji in Boao also said that he expects that in the next five years, imports and exports of goods in the Asian country will amount to more than $32 trillion.

China is currently going through an unfavorable period in terms of the state of affairs in the local economic system. Many experts and investors expected that 2023 would be a time of rapid economic recovery in the Asian country after a significant downturn during the coronavirus pandemic and related restrictions. But these hopes disappeared into the dark metaphysical space of what has not become reality. It is worth noting that at the beginning of 2023, the Chinese economy showed positive momentum, which quickly weakened. The first months of the current year are more positive. In this case, an assessment is meant from the point of view of the condition of the economy. Against this background, policymakers have received some relief. As part of efforts aimed at economic growth, Beijing’s main problems are the protracted crisis in the real estate sector and the growing debt of municipal authorities.

Bill Winters, CEO of Standard Chartered Bank, said during a speech at the World Government Summit in Dubai in February this year that China is facing a trust problem. In this case, it implies confidence in the economic system of an Asian country. He also noted that concerns related to the crisis in the Chinese real estate sector continue to intensify. Separately, Bill Winters stated that the Asian country’s economic system is currently undergoing a large-scale transition period.

Zhao Leji promised greater openness of the Chinese markets to foreign investors. He also said that Beijing will reduce the list of sectors of the Asian country’s economic system in which financing from other countries is allowed on a limited scale or is completely prohibited without special approval. This means that China does not adhere to a policy of total isolationism in the sphere of the economy.

Currently, foreign companies are seeking to reduce risks in supply chains and operations outside the Asian country. According to official data from the Chinese authorities, in the first two months of 2024, the inbound foreign direct investment into the state fell by almost 20%.

In early March, the leadership of the Asian country announced that the target indicator of economic growth for the current year is figure, which is 5%. Beijing has also taken several measures to achieve the mentioned goal. Zhao Leji says that the attitude of the authorities gives reason to be confident that China’s economic system continues to recover and will improve in the long term. He also said that investing in an Asian country is investing in the future.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.