Rebuild Trust to Promote Global Recovery

Amid gloomy forecasts for the global economy in 2024, news of China’s 5.2 percent GDP growth in 2023 was a shot in the arm for a world still beset with regional conflicts, lackluster economic recovery, and mounting geopolitical tension.

But despite this outstanding economic performance, dire predictions, and assumptions that China’s economy is verging on collapse continued to dominate some Western media portals. Certain Western media obstinately dwell on the so-called economic “strains” on China’s economy, despite evidence to the contrary in the National Bureau of Statistics (NBS) of China’s January 17 release of this data. As one netizen posted on X in reference to a New York Times article, “There is always a negative cast placed on good news for China.” This is inevitably ascribed to the rising geopolitical confrontation stoked by the United States. At the core of such China-smearing rhetoric is the strategic fear on the part of the world’s largest economy in regard to when the second largest – China – will surpass it.

The world today may be more geographically connected, but is at the same time more divided and fragmented, Founder and Executive Chairman of the World Economic Forum (WEF) Klaus Schwab said at the first plenary of the WEF Annual Meeting 2024 in Davos. Thus, rebuilding trust, the theme of the forum, would appear imperative in order for the world to forge cooperation, crack global challenges, fuel trade, and promote economic growth. 

On January 16, Chinese Premier Li Qiang said in his special address at the opening ceremony of the WEF Annual Meeting 2024, “Whether it is to overcome current difficulties, or to create a better future, it is essential that we discard prejudice, bridge differences and work as one to tackle the trust deficit.” Li then put forth five proposals on rebuilding trust and enhancing cooperation in the economic field, covering macroeconomic policy coordination, international industrial specialization and collaboration, international exchanges and cooperation on science and technology, cooperation on green development, and North-South and South-South cooperation.

In 2023, China’s GDP reached a record RMB 126.06 trillion, posting a growth of 5.2 percent year on year, thus beating the annual target of 5 percent. China’s value-added industrial output, an important economic indicator, also edged up 4.6 percent year on year, while retail sales of consumer goods, a major indicator of the country’s consumption strength, increased 7.2 percent year on year to reach RMB 47.15 trillion.

WEF President Borge Brende said in a recent interview with Xinhua at the WEF headquarters in Geneva that China remains an important engine of global economic growth, despite the grim challenges facing the world economy. His firm belief that China has enough policy tools to revitalize its economy – while pivoting from growth based on investment and infrastructure to growth based on such new areas as electric vehicles – fuels Brende’s optimism about China’s economic development prospects. WEF managing director Saadia Zahidi echoes this upbeat view on China. When asked about China’s economic outlook she replied, “China is one of the very few large economies in the world that is not struggling with inflation, that is not struggling with very high interest rates at present.” Zahidi attributed this to certain measures taken by the Chinese government in regard to the manufacturing sector and green technologies, and also to revitalizing trade.

The global economic community witnessed once more in Davos China’s determination to champion globalization and deepen opening-up, and the country’s commitment to creating favorable conditions for the rest of the world to share in China’s development opportunities.

Chinese Premier Li Qiang pointed out in Davos that, rather than seeking short-term growth while accumulating long-term risks, China’s focus has instead been on strengthening the internal drivers. “The overall trend of long-term growth will not change,” Li said. Home to more than 200 mature industry clusters, China is the only country in the world that possesses all sections of the United Nation’s International Standard Industrial Classification of all economic activities (ISIC). The added value of its manufacturing industry accounts for around 30 percent of the global total, having ranked first in the world for 14 consecutive years. Meanwhile, the country’s rising innovation capacity, spurred by increased input into research and development, as well as rapid application of such new technologies as cloud computing, big data, artificial intelligence, and blockchain, is nurturing its new growth drivers. China now has some 400,000 high-tech enterprises, and ranks a global second in the number of unicorn companies, Li said. In addition to promoting the country’s domestic development, this also adds impetus to global growth. 

In recent months foreign investors have, according to the State Administration of Foreign Exchange (SAFE), increased their holdings of Chinese domestic bonds, the net increase having hit record highs last November and December. Net inflows of foreign direct investment, meanwhile, registered notable growth in December, surpassing US $10 billion, so accentuating the country’s sustained appeal for international investors.

The year 2023 witnessed consumption as a significant growth driver for China’s economy, final consumption having contributed 82.5 percent to the country’s GDP growth, while retail sales of consumer goods soared to over RMB 47 trillion. Harbin’s surprise tourism peak earlier in 2024 rendered it a social media sensation. The 3 million visitors to the capital of northeast China’s Heilongjiang Province during the three-day New Year holiday generated RMB 5.91 billion of tourism revenue, triggering a nationwide tidal wave of tourism promotion on social media platforms. The coming Spring Festival, when a record 9 billion trips is expected, according to the Ministry of Transport, will give further rein to China’s huge consumption potential. 

“We Chinese people believe that benefits should be mutual. True and good development is development for all,” Chinese Premier Li Qiang said. In Davos, China showed its sincerity and confidence by sending a message of solidarity with the rest of the world. “Only when all sides treat each other with sincerity and work in the same direction can there be a stronger foundation of trust and more fruits of cooperation,” the premier concluded.