China has announced a 2024 GDP growth target of around 5 percent, sparking renewed discussions about the nation's economic trajectory. While some voices claim that China's economy has \"peaked,\" analysts argue that such viewpoints are unfounded.
A recent commentary from Yuyuan Tantian, a social media account associated with China Media Group, challenges the notion that China's economic expansion is reaching its limits. The piece suggests that critiques echo past claims of an impending \"collapse\" and often rely on superficial comparisons.
For instance, comparing China's GDP to the U.S. without accounting for differences in inflation and exchange rates can distort the true economic picture. The commentary highlights that the U.S.'s high inflation rates have inflated its nominal GDP, and a stronger dollar makes China's yuan-denominated GDP appear smaller when converted to dollars.
Claims that China's economic growth has peaked are not new. Similar assertions, such as the \"middle-income trap\" theory popularized around 2010, have been repeatedly disproven by China's sustained development and its pursuit of high-income status.
The Yuyuan Tantian article also points out that comparisons across various metrics—for example, China's population with India’s, total output with the U.S., or growth rate with Vietnam—consistently lead to the same erroneous conclusion of an impending economic peak. These comparisons overlook the unique contexts and challenges faced by each country.
Furthermore, the commentary addresses the surge of negative narratives on overseas social media platforms like X and Reddit. It notes that in January and September 2023, discussions about China's economy peaked, with 40 percent focusing on real estate and fueling the \"property bubble\" narrative.
Countering these claims, the article asserts that China is still in the late stages of urbanization, offering significant potential to boost domestic demand. Gao Shanwen, chief economist at SDIC Securities, emphasized that the current real estate situation represents a price correction rather than a bursting bubble. He highlighted the evolving landscape of the real estate sector, pointing to new opportunities amid market adjustments.
Additionally, Dong Jianguo, vice minister of housing and urban-rural development, noted a strategic shift from new housing to existing housing. While this may impact upstream industries like steel and cement, it opens doors for downstream sectors such as furniture, appliances, and home improvement.
The article concludes by emphasizing that China's confidence in its economic future is rooted not in comparisons with other nations but in its unique development path and problem-solving strategies tailored to its specific circumstances.
Reference(s):
cgtn.com
