As the year draws to a close, it is high time to reflect on China’s economic performance, and consider making some opportune revisions to the economic strategy, which may prove to better resonate with the people and to propel economic growth next year.
The notable tariff war launched by the US on China, was largely unexpected earlier in 2018, but has caused significant issues for this country’s economy, pummeling foreign trade and leading to marked declines in the stock market in particular. As the tit-for-tat retaliations worsened, the economy increasingly felt the pinch and faced downward pressure.
Looking at the domestic policy tools in 2019, the leadership will adopt a more proactive fiscal and easier monetary policy. Some economists have proposed that the policymakers come out with a moderate stimulus plan and fast-track more infrastructure investments to give a shot into the slowing economy. Others advocate that the government lessen housing sales curbs to reactivate the lackluster property market.
As to the capital markets, economists recommend that the authorities restrict the number of new IPOs brought to the market and to oust more zombie company listings, in order to give the weak market a much-needed chance to recuperate.
And, this is also a good time to ponder the country’s foreign economic policies. To escape from the time-consuming and mostly futile spat with the US government and to circumvent Washington’s overtly aggressive and invasive containment policy, some pundits suggest the government re-adjust its economic strategy, by pivoting more toward Russia and India. At the same time, vigorously propelling the charismatic Belt and Road initiative (BRI), and to pull back from putting too much emphasis on US and some of its close allies, including Australia and Canada.
Though it may somehow be premature to upgrade the current affable China-Russia relations to an outright political and military alliance, statesmen of the two countries ought to seriously consider integrating and aligning the two countries’ economies and technological research and innovation to a significantly higher level.
China’s businessmen could be encouraged to invest heavily in Russian infrastructure – particularly in high-speed railways, expressways, sea ports, airports and energy sectors, help improve its household appliance manufacturing capability and expand its agricultural production.
The two governments’ agreed partnership to co-design and assemble large commercial aircraft is a demonstration of that collaboration and friendship. By all metrics, the potential of cooperation between the two countries are enormous, and its global impact will be colossal.
And, China needs to gauge how to upgrade its current ordinary relationship with India, which most observers classify as not too warm yet not too difficult either. Looking back over the last couple of years, it is of great political wisdom and far-sight of the top leaders of the two neighbors to avert a border conflict over an outpost standoff in 2017, which could have been calamitous for the two countries and the whole region.
Their coolness and willingness to extend hands to each other are clear indications that they are not trigger-happy. That coolness defines how the two countries could resolve their historical territory problems through good-willed negotiations. And, China could also be of great help to assist India and Pakistan – long-time foes – to mitigate animosity and forge a new and positive relationship.
As the world’s two most populous countries, it is imperative for the two to work for closer economic cooperation for the benefits of billions of people longing to live prosperous lives – just like their counterparts in the Western developed countries. On the part of New Delhi, it is time for the leaders there to take serious consideration about joining the BRI, and abandon their geopolitical thought – which politicians from Washington and Canberra have been whispering in their ears – that India could help contain China’s rise from the southern flank.
Through enlarging mutual free trade and investment, the economies of India and China are able to develop their markets, and the two countries’ huge population and market scale will provide strong support and backup to foster momentous growth.
When the economies of China, Russia, India and many other developing countries along the Belt and Road route in Africa, Asia and Europe gain traction and prosper, there won’t be any chance for Washington to wield its economic penalty baton against these countries.