By accelerating transforming the economic growth model, China can better prepare itself for a new round of world economic growth. China has made great contributions to global economic recovery, and will play a more active role in a healthy world economy.
Statistics showed that China’s gross domestic product (GDP) grew nearly 8 percent in the second quarter from a year earlier. The Chinese economy has made progress while maintaining stability.
As the country recently introduced a series of new measures for maintaining stable growth, the international market has felt the positive impact of a stable Chinese economy.
However, certain international forces have continued to make negative predictions about the Chinese economy, showing their lack of proper understanding of China’s unremitting efforts to strengthen and improve macroeconomic management.
The Chinese economy is slowing down due to both international and domestic factors.
Internationally speaking, the weak growth in developed countries caused by the global financial crisis has had a marked negative impact on the Chinese economy. China’s trade surplus rebounded greatly in the second quarter, but not due to the acceleration of export growth or slowing down of imports. In fact, the growth of China’s exports to the United States, Japan, and Europe has slowed down markedly, becoming a major constraint on economic development in the eastern regions.
Domestically speaking, China’s economic slowdown is a legacy of the global financial crisis. In order to resist the crisis, China introduced a large-scale economic stimulus package, which created objective conditions for subsequent inflation and soaring housing prices. The country then adopted a series of macro control measures to curb the inflation and cool the overheated property market, when the contribution of consumption to its GDP growth failed to increase markedly. This countercyclical action has inevitably caused a slowdown in domestic demand.
It is worth noting that the economic slowdown has objectively reduced the inflationary pressures facing China, which made a soft landing for the Chinese economy achievable. In the long run, it will promote China’s economic restructuring and transformation of its economic growth model.