Beijing, July 21, 2024, The Europe Today: Overseas financial institutions are expressing strong confidence in China’s economic prospects, as the nation’s efforts toward high-quality growth are yielding positive results. The latest data from the National Bureau of Statistics (NBS) indicates that China’s gross domestic product (GDP) expanded by 5 percent year-on-year in the first half of the year.
On a seasonally adjusted basis, GDP grew by 0.7 percent in the second quarter, marking the eighth consecutive quarter of positive growth. The Chinese economy’s comparative advantage largely stems from research and innovation, according to Wu Yibing, head of China for Singapore’s state investment company Temasek.
“China’s past strength in manufacturing was usually attributed to its abundant labor force and high production efficiency,” said Wu. “Now, the focus has shifted to research and innovation.”
In the first half of the year, the country’s value-added industrial output, a crucial economic indicator, increased by 6 percent year-on-year, according to NBS data. A detailed analysis of the data reveals that the output of the equipment manufacturing sector, which accounts for one-third of the overall industrial output, climbed by 7.8 percent during this period.
Additionally, the high-tech manufacturing industry demonstrated robust growth, with its output rising by 8.7 percent in the first half of the year. Notable increases were seen in the production of service robots, smartphones, and new energy vehicles, which surged by 22.8 percent, 11.8 percent, and 34.3 percent, respectively.
Bloomberg reported on July 16 that China’s long-term quest for high-quality growth is beginning to bear fruit. “Advances in electric vehicles, solar panels, and other high-tech industries have helped keep economic expansion within reach of its targeted pace of around 5 percent,” the report stated.
Investment and exports have also been highlighted as significant drivers of China’s economy by financial institutions. According to Ji Mo, chief China economist of DBS Group Research, the effects of large-scale equipment upgrades and the trade-in of consumer goods are driving effective investment, bolstered by the issuance of local government special bonds and ultra-long special treasury bonds.
Data shows that China’s investment in infrastructure construction during the January-June period rose by 5.4 percent from the previous year, while manufacturing investment increased by 9.5 percent. Additionally, the country’s net exports of goods and services contributed 0.7 percentage points to GDP growth during the same period.
Liu Jing, chief economist for Greater China at HSBC, noted that China has become increasingly important as a major global supplier of goods, continuing to expand its market share despite trade restriction measures.
The accelerated development of new quality productive forces, the continuous release of policy effects, and the recovery of external demand have supported China’s economy. However, multiple experts from overseas financial institutions have emphasized that further reform and opening-up are needed to address challenges such as insufficient effective demand and a complex external environment.
