China’s gross domestic product (GDP) is expected to reach about CNY140 trillion this year, reaffirming the country’s role as a major contributor to the world’s economic growth, Zheng Shanjie, Chairman of the National Development and Reform Commission (NDRC), said. Going forward, the country is poised to place greater emphasis on unlocking the huge potential of its vast and resilient domestic market to underpin continued economic recovery, with stronger policy support to further boost consumer spending and confidence. Zhang said that the estimated increase in China’s GDP during the 14th Five Year Plan (2021-25) period — over CNY35 trillion — is equivalent to the combined economic output of Guangdong, Jiangsu and Shandong provinces, the country’s top three provincial economies, and exceeds the GDP of Germany, the world’s third-largest economy. “China’s contribution to world economic growth has stayed at around 30% in recent years, and China has managed to maintain an average growth rate of 5.5% over the past four years despite numerous shocks,” Zheng said at a news conference in Beijing.
Yuan Da, Secretary General of the NDRC, highlighted the huge growth potential of China’s ultra-large domestic market, saying that “domestic demand has always been the main driver and stabilizer of China’s economy”. China’s domestic demand contributed an average of 86.4% to the country’s economic growth during the past four years, with final consumption contributing 56.2%, an increase of 8.6 percentage points compared with the 13th Five Year Plan (2016-20) period. China’s consumer prices rose for the first time in five months in June, adding to the latest sign of improving consumer sentiment and stable demand. The country’s consumer price index rose 0.1% year-on-year in June, up from a 0.1% drop in May. The core CPI, which excludes volatile food and energy prices and is deemed a better gauge of the supply-demand relationship, increased 0.7% year-on-year in June, according to the National Bureau of Statistics (NBS).
Feng Lin, Executive Director of the Research and Development Department at Golden Credit Rating International, said that with the first-half CPI dropping 0.1% year-on-year, “price levels remain subdued, with still-weak consumer demand being the primary reason. It also leaves ample policy space for further monetary easing and stronger fiscal stimulus in the second half,” which “will help cushion the impact of external uncertainties.” Ben Simpfendorfer, Partner at consultancy Oliver Wyman, highlighted the importance of ensuring sustained recovery in consumer confidence, calling for more fiscal spending on education and healthcare and building a stronger social safety net, the China Daily reports.
