China Economic Observer Unpacks 2024 Economic Growth
Jan 23-2024
The 67th edition of China Economic Observer (CEO), a long-running event of the NSD, was held on January 18, 2024 with a focus on the challenges and opportunities for the Chinese economy in 2024. Four scholars took turns to deliver keynote speeches, before conducting roundtable dialogues and answering questions from the audience.
Mr. Xu Xianchun, a statistics scholar, summed up the features of the Chinese economy in 2023 based on statistics on production, demand, income, and price. Regarding production, the secondary industry experienced faster growth and contributed significantly to economic expansion. Of demand, consumption demand had an evident pull on the economy, while investment demand was insufficient. Income delineated an upward trajectory for households, firms, and the government alike. Consumer prices enjoyed stable increase, and prices in manufacturing saw a shrink in decline. Mr. Xu said that currently the economy is on a solid footing, but is in need of policy to spur consumption and investment.
Mr. He Haifeng, Chief Economist of Guotai Junan Securities, spoke on the challenges for the Chinese economy and proposed strategies to tackle them. The four major challenges that went under his microscope included de-globalization, global warming, decline in investment growth, and stratification and fluctuation in consumption. The focal point for current economic work is to promote growth, which requires safeguarding short-term economic operation and addressing challenges. Accordingly, he set forth three preliminary strategies in the mid to long term. The first one is developing and building Belt and Road with partner countries in a high-quality fashion, particularly pushing forward infrastructure construction. The second suggestion concerns accelerating the accumulation of new momentum, with digitalization, digital economy, and integration between digital and real economy being key areas. The third focuses on building a powerful digital finance country, in which top Chinese investment firms grow in leaps and bounds.
Prof. Yu Changhua, NSD Associate Professor of Economics, delved into the logic behind China’s economic growth and new drivers for growth. He believed that the steady development in investment and high tech will gradually help downstream industries to grow. Efforts should be made to maintain consumption growth and increase investment, especially in high tech and the digital economy. As international trade makes negative contribution to GDP growth, it is imperative to actively explore overseas markets by supporting Chinese firms to go abroad, introducing high-quality resources into the domestic market, and deepening Belt and Road cooperation. More can be also done to further reduce regional barriers, promote inter-regional connections, and improve the unified national market. Lastly, he called for fully leveraging digital factors and the digital economy in economic growth.
Prof. Zhao Bo, NSD Associate Professor of Economics, spoke on the outlook for the Chinese economy in 2024. After analyzing the global economic growth, he highlighted the contribution of technological advances and innovations to the Chinese economy. However, as China is close to the global forefront of some technologies, technological advancement has slowed down. In the short term, economic growth will have to contend with financial risks in the real estate industry, asset price decline, and consumer confidence; over the long term, it will be confronted with an aging population, rise in leverage ratios, and environmental issues. Prof. Zhao predicted that the Chinese economy will grow at 5-5.5% in 2024. In the face of challenges, China is pressed to find new growth drivers to achieve high quality development. The key, he said, lies in upgrading the manufacturing sector, driving digital transformation, deepening reforms, as well as lowering policy uncertainty while at the same time enhancing policy compatibility and transparency.
