BEIJING, Dec. 18 : Amid global economic uncertainties, China continues to demonstrate resilience, adapting its strategies to maintain growth.<\/p>\n
At the CAIJING Annual Conference, held this week, leading financial institutions such as UBS, Morgan Stanley, and the IMF provided insights into China\u2019s evolving economic posture in the face of both external challenges and internal shifts.<\/p>\n
Morgan Stanley\u2019s Chief China Economist, Robin Xing, highlighted that China is poised to move from past approaches and shift towards more dynamic and responsive economic strategies, including consumption stimulation, social security enhancement, and proactive debt management.<\/p>\n
\u201cIf its fiscal policy takes a proactive stance, transitioning from investment to consumption while managing debt, China could enter a positive economic cycle in the next one to two years,\u201d Xing said, adding that China is well-positioned to handle a higher central government budget deficit underpinned by its strong national balance sheet.<\/p>\n
The economist believes that although there are significant macro challenges during this period of transformation, there are many opportunities for structural adjustment. He identified three emerging areas that could drive future growth: artificial intelligence (AI), humanoid robots, and green energy transition.<\/p>\n
\u201cChina\u2019s vast data resources, diverse application scenarios, and a consumer ecosystem are conducive to AI\u2019s commercialization,\u201d Xing noted. The same goes for the rise and widespread use of humanoid robots. \u201cChina has certain cost advantages and scale benefits across the entire industrial chain,\u201d he added.<\/p>\n
In the green energy sector, Xing pointed out that, while the U.S. shows hesitancy, Chinese enterprises can capitalize on European and global commitments to energy transition and foster win-win cooperation, China Economic Net (CEN) reported.<\/p>\n
Addressing the potential impact of U.S. tariff hikes, Xing warned that proposed tariffs could increase U.S. inflation by 1 percentage point and reduce economic growth by 1.4 percentage points over the next two years. In this scenario, he suggested the U.S. could adopt a phased and gradual increase in tariffs that would have a more manageable impact on China compared to that in 2018-2019.<\/p>\n
In addition, China\u2019s export market has become more diversified over the past six years. \u201cThe U.S. now accounts for only one-seventh of China\u2019s total exports, compared to one-fifth previously,\u201d he said, highlighting the reduced dependency on the U.S. market.<\/p>\n
UBS\u2019s Chief China Economist, Wang Tao, emphasized the importance of expanding domestic demand in response to external shocks. \u201cExpanding internal demand is the most crucial strategy at present,\u201d Wang said. She highlighted China\u2019s focus on stimulating consumption and improving livelihoods as key to driving internal demand and reducing reliance on external trade amid rising global trade protectionism.<\/p>\n
The IMF\u2019s Chief Representative in China, Steven Barnett, attributed China\u2019s rapid economic rise to structural reforms that maximized resource allocation. \u201cChina\u2019s economic success is the result of reforms that channelled resources to their most productive use, he said.<\/p>\n
Barnett emphasized the potential for further growth through consumption, noting that despite significant gains in the past two decades, consumption still lags behind GDP growth. \u201cAll production is ultimately to meet consumer demand, so I believe rapid growth in consumption will be greatly beneficial to China\u201d.<\/p>\n
The analyses from UBS, Morgan Stanley, and the IMF align on several key points: China\u2019s strategy is a balance between managing external challenges and fostering internal growth. The country\u2019s focus on innovation, consumption, and social security reflects a pragmatic approach to long-term economic stability. As China navigates the evolving global economic landscape, its strategic shifts will play a critical role in shaping its economic future.<\/p>\n","protected":false},"excerpt":{"rendered":"
BEIJING, Dec. 18 : Amid global economic uncertainties, China continues to demonstrate resilience, adapting its strategies to maintain growth. At the CAIJING Annual Conference, held this week, leading financial institutions such as UBS, Morgan Stanley, and the IMF provided insights into China\u2019s evolving economic posture […]<\/p>\n
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