Journal : China Daily (English) Date : Author : NA Page No. : NA
URL : http://www.chinadaily.com.cn/a/201803/05/WS5a9c972aa3106e7dcc13f7cd_3.html

Since the current leadership took office in 2012, the country has seen GDP rise and the number of poor people fall, as Hu Yongqi reports.

Six years ago, Chu Chenggen was a driver carrying loads between his village in Anqing, Anhui province, and Hefei, the provincial capital.

Every morning, Chu, then age 30, got up before dawn. Although he could earn as much as 300 yuan ($47) a day, the long working day meant he didn’t get home until late at night, which left little time to spend with his son, who often complained about his absence.

In 2013, Chu secured a job as a driver for a logistics company in Hefei, so he decided to move his family to the city, where his son would also receive a better education.

“There are many employment opportunities for blue-collar workers in the city and hardworking people like me can make a living,” Chu said.

“My driving skills helped a lot when I applied for the new job, which finally gave me a chance to spend more time with my son at weekends.”

Chu believes Hefei has benefited from the government’s proactive employment policy that has helped to create more jobs in urban areas.

More than 13 million jobs have been created in urban areas every year since 2012, while more than 10 million migrant workers have flocked into cities in search of jobs, according to the Ministry of Human Resources and Social Security.

The proactive employment policy has created many jobs for urban residents and attracted migrant workers to cities, Bai Jingming, vice-president of the Chinese Academy of Fiscal Sciences, said.

Employment prospects also improved as GDP rose to more than 82 trillion yuan last year, from 54 trillion yuan in 2012. Meanwhile, growth targets, set in the Government Work Report delivered by Premier Li Keqiang every March, have all been fulfilled in each of the past five years. Last year, GDP grew by 6.9 percent. It was the first time in five years that the rate beat the one recorded the previous year.

Moreover, the consumer price index rose by an average of about 2 percent per annum. The biggest rise – 2.6 percent – occurred in 2013, while the lowest, 1.4 percent, came in 2015, according to the National Bureau of Statistics.

The economy has achieved a high rate of growth, with a low CPI and low unemployment. With the macroeconomic situation in good health, the rate of economic growth and the number of jobs have risen in a coordinated way, which has helped to improve people’s livelihoods, Bai said.

Shortly after their move to Hefei, Chu’s wife was hired by a company that sells bamboo flooring, which saw the couple’s combined monthly earnings rise to about 12,000 yuan. That enabled them to purchase an apartment in 2015, using their savings of nearly 200,000 yuan as a down payment, and they began paying a monthly mortgage of 3,900 yuan after they received the property certificate.

The family’s situation illustrates the surge in average disposable incomes in China over the past five years. According to the World Bank, the country ranked 65th globally in terms of gross national income in 2016, while in 2012, it was 112th.

Quality and rebalance

Between 2013 and 2017, China’s economic success also saw growth in areas such as crop yields, industrial added-value, sales of consumer goods, exports of goods, express delivery services, the number of mobile internet users and per capita disposable income.

The most important change in the past five years has been the eradication of the structural imbalance in the economy, according to Sun Xuegong, director of the economic institute at the National Development and Reform Commission.

Investment and consumption are now basically balanced, as are internal and external demand and the manufacturing and service sectors, he said, adding that improvements are being seen in other problematic areas such as environmental protection.

As the World Bank said in a report last month, China’s economic rebalancing is underway and the government’s goals can be achieved by the promotion of innovation, market competition and the private sector.

For example, the reduction of overcapacity has been a key factor in the country’s economic agenda in recent years. Last year alone, more than 50 million metric tons of iron and steel were cut, along with 250 million tons of coal production capacity.

Sun said excess production capacity in some industries is the inevitable result of changes in the types of economic development and restructuring. In many countries the problem can be persistent, but in China, the government has used coordinated policies and market mechanisms to rebalance supply and demand.

The change was reflected in the report General Secretary Xi Jinping delivered to the 19th National Congress of the Communist Party of China in October.

Xi said China has made enormous economic achievements as a result of concerted efforts to transform development methods and improve quality and efficiency. The economic structure has been optimized, with emerging industries such as the digital economy booming, while infrastructure has substantially improved in terms of high-speed railways, highways and airports, he said.

He also pointed out more than 80 million people from rural areas have become urban residents, and the coordination of regional development and innovation had been strengthened to produce scientific and technological breakthroughs. The State Council, China’s Cabinet, has approved 19 independent innovation demonstration zones, including facilities in Shenzhen, Guangdong province, and Ningbo and Wenzhou in Zhejiang province, to promote an innovation-driven strategy to improve original ideas and competitiveness.

Poverty alleviation

Poverty alleviation has also been a priority for the central leadership since it took office in 2012.

In a recent report called Promoting a More Inclusive and Sustainable Development for China, the World Bank said the country can achieve more inclusive and sustainable development by the use of coordinated reforms across a broad range of areas that maximize the development impact and address the nation’s developmental challenges.

The report highlighted China’s “unprecedented achievements” in rapid economic growth and poverty alleviation, and said rapid growth has been made possible by a wide range of reforms that have transformed the country into a more open and market-based urbanized economy.

“China’s remarkable progress in reducing extreme poverty has significantly contributed to the decline in global poverty,” said Hoon Soh, World Bank program leader for economic policies for China.

However, more than 30 million people are still living in poverty, and the report noted that efforts to improve living standards will continue, and estimated that the rate of extreme poverty will fall below 1 percent this year.

It also said the growth in consumption among poor households shows that they have shared in the country’s rising prosperity.

Sun, from the NDRC’s economic institute, said although the income gap widened for a time, the low-income group has maintained earnings growth.

He added that in the past five years, more support has been given to people on low incomes. More important, the poverty alleviation campaign has focused on long-term goals by cultivating appropriate industries and providing impoverished people with training in certain skills, instead of simply providing subsidies, which is vital to building a fair and energetic society.

New models promoted to facilitate businesses

In the past five years, new models and industries have emerged to underscore China’s high-speed growth, including the introduction of pilot free trade zones and the booming sharing economy.

Since the China (Shanghai) Pilot Free Trade Zone was established in September 2013, a number of measures have been taken to facilitate trade by promoting the negative list for foreign investors, which removed several restrictions on foreign investment, and the single-window service for businesses, meaning all necessary facilities are available in one place.

So far, 11 such pilot zones have been set up in municipalities such as Tianjin and Chongqing, and in the provinces of Shaanxi and Sichuan.

Meanwhile, new industries and business models have recorded rapid rises since 2013 thanks to continuing central government support. On several occasions, Premier Li Keqiang has said the government should be cautious and tolerant toward new industries and businesses.

Last year, value-added in strategic emerging industries rose by 11 percent from 2016, while the value-added of high-tech manufacturing rose by 13.4 percent, according to the 2017 Statistical Communique on National Economic and Social Development, released by the National Bureau of Statistics last week.

Last year, 690,000 electric vehicles were produced nationwide, a rise of 51.2 percent from 2016. Meanwhile, the number of industrial robots rose by 81 percent to 130,000, and 2.9 million civilian drones were manufactured, a rise of 67 percent.

Emerging services made a combined operating profit of more than 744 billion yuan ($117 billion), up by 30 percent year-on-year, the document said.

Online retail sales rose by 32 percent, hitting 7.17 trillion yuan and accounting for 15 percent of total sales of consumer goods, the communique said. By the end of 2016, more than 25 percent of villages around the country had e-commerce delivery stations.

China has also become a leader in the sharing economy as the home of 60 of the world’s 224″unicorns” – startups valued at $1 billion or more – according to the Annual Report for the Development of the Sharing Economy released last month by the National Information Center. Thirty-one of those 60 companies were in the sharing economy, accounting for 51.6 percent of the total, the report said.

Contribution to the global economy rises

As the Chinese economy has expanded rapidly in the past five years, the country’s contribution to the global economy has also increased at a fast pace.

On Wednesday, the National Bureau of Statistics said China accounted for about 15 percent of the global economy last year, 3 percentage points higher than in 2012.

The country contributed about 30 percent of global economic growth last year, and was a vital engine driving the world’s economic recovery, according to Sheng Laiyun, the bureau’s spokesman.

Last year, the World Bank said that China contributed an average of 31.6 percent to global economic growth between 2013 and 2016, surpassing the combined contributions of the United States, the eurozone and Japan.

The World Economic Outlook, released by the International Monetary Fund in January, raised the estimate of China’s economic growth this year to 6.6 percent – 0.1 percentage points higher than its projection in October.

Last year, the IMF raised its projected growth rate for the Chinese economy four times, illustrating the confidence the international community has in the world’s second-largest economy, which has benefited from recovering external demand and a faster internal economic transformation to become a more innovation-driven, high-end economy.

Experts are optimistic about China’s potential. Huang Qunhui, an industrial economics researcher at the Chinese Academy of Social Sciences, said the country maintains the advantages of a large population, well-educated human resources and a well-developed national economic system.

China will maintain mid-to high-speed growth in the next few years and will continue to make a significant contribution to the global economy, he added.

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