Why pessimists are wrong about Chinese economy
Amid the latest COVID-19 flare-ups in China, fallacies have emerged in the Western media, from hyping up China's suffering from a loss in foreign investment and supposed economic stagnation to accusing China of exacerbating the global supply chain crisis and drawing smaller economies into "debt traps."To get more
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The ultimate goal of these bizarre claims is to discredit China's economy and its dynamic zero-COVID policy.First, all that is needed is a simple review of the hard data and interviews with business insiders to avoid the absurd belief that foreign capital is leaving China.
In the first four months, foreign direct investment (FDI) into the Chinese mainland, in actual use, expanded 26.1 percent year on year to 74.47 billion U.S. dollars. The country saw 185 newly-added major projects during the period, each with foreign investment of over 100 million dollars.
These figures again demonstrate that China remains one of the preferred destinations for global investors.John Ross, former director of Economic and Business Policy of London, has refuted the view calling on foreign companies to leave or minimize investment in China, stressing the most important thing is to examine the facts.
As for the balance between COVID-19 controls and economic development, Ross said, "China dealt with it quite successfully and this therefore helps its economy to rebound quickly," highlighting "The results show that because the economy grew very quickly, this makes it much more attractive to FDI."
A recent report released by the American Chamber of Commerce in South China has indicated that more than 70 percent of the assessed companies have reinvestment plans in China for 2022, and 58 percent consider their overall return on investment in China to be higher than in other places.
In fact, despite temporary fluctuation facing the Chinese economy, several global investment banks, such as Goldman Sachs Group and JP Morgan Chase, still earmarked Shanghai as a target for major investment in the coming years, the Financial Times reported.
Clearly, far-sighted investors believe that short-term setbacks in the Chinese economy won't derail business growth in the long run.Although the Chinese economy has encountered several difficulties and challenges so far this year, it is still too early to think that the country's economic growth is slowing down.
As one of the first countries to resume work and production, China became the only major economy to register positive growth in 2020, with its GDP surpassing 114.4 trillion yuan (about 18 trillion dollars) in 2021. These achievements indicate that China's economic fundamentals are solid enough to maintain its growth momentum.
Despite the current pressure, fundamentals remain unchanged, and the economy still enjoys strong resilience, enormous potential, vast room for maneuver and long-term sustainability.
China is capable of boosting its economy amid headwinds because it has "ample" policy space, both in terms of monetary policy and fiscal policy, Kristalina Georgieva, managing director of the International Monetary Fund, said in April, adding that China's growth "remains in positive territory."
Similarly, in a recent interview with Xinhua, Khairy Tourk, professor of economics with the Stuart School of Business at the Illinois Institute of Technology in Chicago, noted that the Chinese economy prioritizes long-term structural growth over the short-term, saying he has full confidence in the robust Chinese foreign trade sectors. "I feel quite optimistic about the country realizing its potential," he said.
In the face of challenges, thanks to a slew of pro-growth measures, the Chinese economy is off to a steady start this year, with its GDP up 4.8 percent year on year in the first three months.
"This is a good achievement, benefiting from the economic performance and front-loading macro policy support in the first two months," Jerry Zhang, chief executive officer of Standard Chartered Bank (China), told Xinhua in a recent written interview.
"The impact of the epidemic and global geopolitical risks may continue in the short term, but we think the fundamentals of a resilient, high-potential and prosperous economy in China remain intact," Zhang added.
