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Chinese economy remains promising despite pressure

ZHAO XUZHOU | 2022-07-28 | Hits:
Chinese Social Sciences Today

A staff member of a technology company introduces a facial data collection device at the 5th Digital China Summit & Exhibition in Fuzhou, Fujian Province, on July 22. Photo: CFP

China’s GDP expanded 2.5% year on year in the first half of 2022, data from the National Bureau of Statistics (NBS) showed on July 15, despite the marked increases of downward pressure the Chinese economy faced in Q2 due to domestic COVID-19 resurgences.

Recently, at the Eleventh International Symposium of Quantitative Economics, 2022 (Changchun, China), organized by the Center for Quantitative Economics of Jilin University, scholars concluded that the Chinese economy is heading towards balanced development, indicating enormous growth potential. When the time is ripe, it will release new momentum and achieve high-quality and high-speed growth, they said.
In 2021, the Chinese economy performed well on the whole. According to NBS data, China’s GDP exceeded 114 trillion yuan (about $18.1 trillion) in 2021, accounting for over 18% of the global economy. China is not only the world’s second largest economy, but also the largest engine of global economic growth. However, current economic development faces the trifold pressure of demand contraction, supply shocks, and weakening expectations.
“Such trifold pressure is both a short-term problem and a medium- and long-term challenge,” said Li Xuesong, director of the Institute of Quantitative and Technological Economics at the Chinese Academy of Social Sciences. Despite a series of challenges facing China in economic and social development, it still has many advantages, such as significant institutional advantages, improved governance efficiency, long-term good prospects for growth, solid material foundation, rich human resources, broad market space, strong development resilience, and overall social stability.
The Outline of the 14th Five-Year Plan (2021–25) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 proposes accelerating digital development and building a digital China. 
At present, the development of China’s digital economy has a good policy environment, and the digital economy has become a new engine for China’s high-quality economic development. Meanwhile, green development has gained an increasingly important strategic position.
Li Zhanfeng, a professor from the School of Statistics and Mathematics at Zhongnan University of Economics and Law, found in his research that the digital economy can lower operating costs, spur scientific and technological innovation, promote enterprises’ transformation, reduce demand for high energy consumption, strengthen environmental governance, and boost green total factor productivity (TFP). As such, continuously advancing the digital economy, creating a sound environment for digital economic development, and promoting the benign interaction between digital economic development and the environment are essential to improving green TFP in the new era.
Carbon emissions are closely related to economic and social development. China is an important participant, contributor, and forerunner in the global response to climate change. With the carbon peaking and carbon neutrality goals proposed, green growth is becoming an obvious undertone for the high-quality development of China’s economy, and the carbon goals are now important objectives on the agenda of China’s medium- and long-term development.
Carbon peaking is the only way to achieve carbon neutrality, and also an important starting point for promoting green transformation. Carbon emission rights have gradually become a new right to development, which is of great significance for healthy, stable, and sustainable economic and social development.
The rational initial carbon quota allocation among regions is the basis for reducing carbon emissions, and also a crucial part of facilitating the orderly construction of the national carbon trading market. Wang Wenju, secretary of the Party Committee of Beijing Wuzi University, suggested further improving the operating mechanism of the national unified carbon trading market and formulating a carbon quota allocation plan that is fair, efficient, sustainable, and operable. It is advisable to formulate differentiated and inclusive plans for coordinated development and emission reduction, based on differences in development stages, economic strength, resource endowments, and industrial layouts among different regions.