Report on the Work of the Government: A Window to China’s Development Path

Huge Influences on the World

This year’s report on the work of the government said that in 2017 all the main targets and tasks for economic and social development were accomplished and performance exceeded expectations. GDP grew 6.9 percent and personal income rose 7.3 percent, both beating the previous year’s growth rates. Around 13.51 million new urban jobs were created, and the jobless rate was the lowest in recent years. Industrial growth began to rebound, and corporate profits increased by 21 percent. Government revenue grew 7.4 percent, reversing the slowdown in growth. The total import and export value rose 14.2 percent. Inward foreign investment reached US $136.3 billion, hitting a new all-time high. The state of play in the economy was good, with growth and quality, structural improvement, and performance each reinforcing the other.

As the largest driver of growth for the world’s economy, China’s stability is crucial to the world’s stability, China’s progress will promote that of the world, and China’s sound development will contribute to that of the world. This point could be further explained by the increase in import and export.

China’s import and export volume increased to RMB 27.79 trillion last year, registering a 14.2 percent growth year on year. Export totaled RMB 15.33 trillion, rising by 10.8 percent; import rose by 18.7 percent to RMB 12.46 trillion. Trade surplus dropped by 14.2 percent to RMB 2.87 trillion.

The huge growth of China’s international trade, import growth in particular, has created a positive spillover effect on the world. Firstly, China’ imports from emerging markets like Latin American countries and African countries rose by 22 percent, and exports to these areas increased by 17.3 percent; secondly, China’s trade volume with the developed economies of Europe, the U.S. and Japan increased by 14.8 percent; thirdly, China’s crude oil import and natural gas import from energy-exporting markets rose by 10.1 percent and 26.9 percent respectively, directly promoting the rebounding of international commodity prices; fourthly, China’s export of automobiles, computers and medical instruments and equipment to technology-importing markets grew by 27.2 percent, 16.6 percent, and 10.3 percent respectively.

China has led the recovery of the international exports and imports. Statistics from the World Trade Organization show that during the first three quarters of 2017, trade in goods among the 70 major economies in the world increased by over nine percent, reaching an all-time high. This partly comes from recovery and partly comes from further growth. There is hope that the world may say goodbye to the international financial crisis that has persisted for 10 years.

In the backdrop of economic globalization, China’s growth is in sync with that of the world. The 40 years’ reform and opening-up has witnessed China’s opening and inclusion to the world economy. In terms of trade in goods volume, China ranked 29th in 1978, but now ranks first. Although there were three periods of negative growth, each time it happened, China assisted the world’s recovery afterwards.

The first negative growth occurred during the Asian financial crisis. In 1998, China’s international trade volume dropped by 0.4 percent on a year-on-year basis, and imports decreased by 1.5 percent. However, in the following years, China registered continuous trade growth, not only promoting trade increase in Asia, but also contributing to the world’s trade progress. But back then China’s trade volume only ranked 10th in the world.

The second negative growth happened in the international financial crisis. In 2009, China’s trade in goods dropped by 16.3 percent on a year-on-year basis, with imports decreased by 13.7 percent, and exports by 18.3 percent. But in the following years, China’ s international trade witnessed continued growth, contributing to the growth of the international trade. In 2013, China overtook the U.S. to become the top goods trader.

The third negative growth occurred due to the large-scale decrease of international trade. The world’s trade in goods dropped from US $37.96 trillion of 2014 to US $32.18 trillion of 2016, decreasing by 15.2 percent. China’s trade volume dropped from RMB 26.42 trillion to RMB 24.34 trillion during the same period. But now China’s large increase in international trade is once again driving the world’s growth.

China is now transitioning from a stage of high-speed growth to a phase of high-quality development. The dynamism and potential of China’s development continue to be unleashed further, with its development becoming more coordinated and sustainable. In particular, China’s share of the world economy sees a continued rise, thus ensuring China will continue to be a major source of growth and stability of the global economy.  

Hu Angang is a professor in the School of Public Policy & Management at Tsinghua University and director of the Center for China Study at Tsinghua-CAS (Chinese Academy of Sciences).