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China’s economy: creating certainty in an uncertain world

September 14, 2020

In the face of major changes unseen in a century, countries around the world are facing many problems and challenges, and the future of the world economy and global governance is deeply mired in the mist of uncertainty. Only by seeking certainty amidst uncertainty can the world economy continue to grow and global governance operate effectively. Similarly, creating certainty in uncertainty will also be a major contribution to the world economy and global governance.
In a changing situation, the internal logic of China’s common development with the world remains unchanged, and the Chinese economy is still an important indicator for the world economy to seek certainty. Entering the new century, China has gradually become one of the most influential variables of the world economy and an important source of certainty for the world economy. The Chinese economy has made a significant contribution to world economic growth. Data in 2018 showed that China’s GDP exceeded 90 trillion yuan, contributing nearly 30% of the world economic growth. The data for the first quarter of 2019 showed that even in a very challenging international situation, China’s economy still maintained stable operation, with a year-on-year growth of 6.4% in the first quarter. The sustained and steady growth of China’s economy sends a positive signal to world economic growth and produces a linkage effect. So the Chinese economy has a great “sense of existence” in the world economy. China’s development cannot be separated from the world, and the world’s development cannot be separated from China.
In a changing situation, China is trying to transform toward innovation-driven and high-quality economic growth. This is also a required course for China and the world to explore new driving forces for economic growth and new development trends. Putting the world economy into a historical long cycle, the relative weakness of growth is more obvious, which is particularly related to the lack of growth momentum. In history, every industrial revolution brought about a substantial increase in productivity. When the dividends of the last industrial revolution are exhausted and the next industrial revolution has yet to come, the world economy urgently needs to actively explore innovation and seek new drivers of economic growth. Emphasizing scientific and technological innovation and cultivating new industries is an important driving force for China’s economy to maintain relatively stable growth. Data in 2018 showed that the scale of China’s digital economy has gradually risen to 34.8% of GDP, reaching 31.3 trillion yuan. In the “2018 Global Innovation Index” released by the World Intellectual Property Organization, China ranked 17th in the world, becoming the only middle-income economy among the top 20 countries. While the International Monetary Fund lowered its expectations for world economic growth, it also raised its expectations for China’s economic growth. On one hand, this affirmed China’s ability to carry out macroeconomic regulation; on the other hand, it also saw the innovation potential of China’s economic growth. Of course, the latter is inseparable from China’s efforts to encourage innovation and the development of high-tech industries. Exploring new economic dynamics is not only a compulsory course for China but also for the world economy to carry out structural adjustments and explore new development trends in the medium and long cycles.
In a changing situation, as an important participant and contributor to global governance, China’s ongoing healthy, sustained, and steady economic growth is the definite source of the advancement of global governance, and it is great news for the international community. China’s participation will help the international community overcome public goods deficit and ease the difficulties faced by global governance. At present, some countries attribute their domestic economic and social problems to economic globalization, deny the contribution of economic globalization to the flows of goods, people, capital, and the progress of human civilization, try to go against the trend of the times, deny the major contributions of global cooperative governance to solving global issues, ignore the increasing interdependence between countries, and are unwilling to assume international responsibilities and provide public goods. All these have further exacerbated the global governance deficits. In this context, the “Belt and Road” initiative proposed by China not only respects the historical laws of economic globalization, but also adheres to the basic principles of extensive consultation, joint construction, and sharing, while providing suggestions and solutions for promoting global economic cooperation and common economic development of all countries. The “Belt and Road” initiative has built a bridge between China and related countries in economic development, and has made new contributions to promoting economic globalization and further promoting the innovation, development, and improvement of global governance models.
In a changing situation, China’s determination to support multilateralism together with the international community remains intact, by relying on dialogue, consultation, and cooperation to seek joint solutions to their problems and disputes. Since the end of World War II, the greatest progress of the international community has been the formation of a multilateral system governing international security and the world economy. In a sense, multilateralism has created a good and stable external environment for the development of the world economy. Multilateralism has cultivated the common cognition and common interests of all countries, as well as a new landscape where countries collectively cooperate in response to various global affairs, work together to promote global governance and economic prosperity. China supports the reforms of WTO and other multilateral institutions, and believes that the use of multilateral platforms to resolve relevant conflicts in the economy and other fields can play an important “braker” role in alleviating conflicts and avoiding escalation of conflicts and world disorder. China always believes that only by adhering to the spirit of multilateralism, working hand in hand, and cooperating in governance, can we overcome the governance deficit, trust deficit, peace deficit, and development deficit faced by the international community today, and ultimately achieve mutual benefit, win-win, and global prosperity for all countries.
(Author: Ren Lin, Director of Global Governance Division, Institute of World Economics and Politics with Chinese Academy of Social Sciences, and special researcher, Research Center for the Theoretical System of Socialism with Chinese Characteristic, CASS)