China's economy still has huge room for growth

At the Summer Davos Forum 2015 held on the 9th, the Chinese economy became the focus. A number of participants believed that the recent fluctuations in economic data are only short-term phenomena and that the Chinese economy still has huge room for growth.

Although the year-on-year growth rate of China's gross domestic product (GDP) successfully held on to the 7% mark in the first half of the year, the recent official and new manufacturing PMIs, investment, exports, and other important economic indicators were not satisfactory. The continued volatility of the stock market has caused the external world to reverberate over the Chinese economy.

"(Data fluctuation) is only a short-term phenomenon," said Xu Jin, vice president of Greater China at PricewaterhouseCoopers in an exclusive interview with a China News Agency reporter. He pointed out that although China's economic growth rate has slowed down, it still ranks among the top in the world. “When I consulted a lot of companies, I discovered that what they see in China is a high-growth economy.”

Li Ruilin, chief executive of Boston Consulting Group, also "disagrees completely" with the view that the Chinese economy will stall. “I had exchanges with many large international companies last week and they were optimistic about the growth of China's economy.”

Under this circumstance, the noise of sing and decline in the Chinese economy may be related to the unreasonable expectations. According to Zhu Ning, a dean of the Shanghai Advanced Finance Institute, people have used the Chinese economy to grow at a high rate of 9% or 10%. "Now we must set reasonable expectations from a historical and international perspective."

However, it cannot be denied that there are indeed many risks and problems in the current Chinese economy. Xu Shaoshi, director of the National Development and Reform Commission of China, frankly stated that serious overcapacity, falling industrial and investment "needs to attract high attention," and the contradictions and risks accumulated during the rapid development in the early stages have also gradually emerged.

According to Li Daokui, director of the Su Shimin Scholar Program at Tsinghua University, one of the major problems that has plagued the Chinese economy is that the new growth point is still not fully realized. To successfully weather the difficulties, China should recognize the current economic difficulties, recognize the need for painstaking policy adjustments, and encourage all economic participants to work together.

In fact, China has committed itself to nurturing new growth points. After the "Internet Plus" was written into the 2015 government work report, the official version issued in June officially upgraded this emerging industry model into a national plan and proposed a series of support measures.

These initiatives have already begun to show results. At present, the Internet and digitalization are becoming new investment hot spots for Chinese companies. The latest report released by PricewaterhouseCoopers on the 9th shows that 56% of Chinese companies have invested more than 10% of their revenues in digitalization, and another 10% have exceeded one-fifth of their revenue.

At the same time, the government has also promoted public entrepreneurship and innovation by reducing taxes, reducing fees, canceling and deregulating administrative examination and approval items, setting up new industries to invest in entrepreneurship and guiding funds, and developing “construction spaces”.

As a major move to transfer surplus high-quality production capacity, international production capacity cooperation is also accelerating. Xu Shaoshi disclosed that at present, China has initially delineated 15 key production cooperation countries.

Under such circumstances, many participants are optimistic about the economic outlook of China.

“Although there have been some arduous adjustment tasks in the past two years, the outlook is still promising.” Li Daokui believes that from the second half of the year to the first quarter of next year, the Chinese economy is expected to gradually stabilize.

Xu Jin also said that in the process of accelerating urbanization, entrepreneurial innovation and vitality has been further stimulated and other multiple benefits, China's economic future "still has great room for growth."

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