Chinese Economy: A New Phase

Aug 05-2020   

Globalization has shown signs of backpedaling, but that doesn’t mean de-globalization will become a mainstream trend, writes Prof. Yu Miaojie of the NSD in a commentary. Due to the pandemic and the US protectionism, multilateral cooperation and negation is giving way to regional ones, yet what remains unchanged is the two core traits of globalization, namely multilateral trade and localized production.

Prof. Yu is CCP Party Chief and Deputy Dean of the NSD. He specializes in international trade, international economics, and development economics. In the commentary, he analyzes China’s economic growth in the second and third quarters, as well as prospects of the world economy and the opportunities for China amid the challenges.

Affected by a rebound of the pandemic in Beijing and the belated rollout of fiscal and monetary policies in May, the Chinese economy grew at 3.2% in the second quarter, lower than his initial expectation. He remained confident that a 5-6% growth rate is achievable in the third quarter due to the strengths of various economic index. To realize the goal of creating 9 million additional jobs for the whole year, the key will be the concurrent functioning of proactive fiscal policy, prudent monetary policy, and open policy for international trade.

The world economy might contract by 10-15% by the year. The US or the green back market is likely to face systemic financial risk as its real economy declines and makes the financial industry shrink in size. There’s very little chance that the Chinese economy will suffer from such a risk.

The US GDP stood at USD20 trillion in 2019, while that of China at USD14 trillion. As the US economy seems on way to plummet by 20-30% for the year and China to post 2% GDP growth, the gap is narrowing fast, with huge implication for world economic order.