/ world today news/ The last three years, from 2020 to 2023 inclusive, were extremely difficult for the global economy in general and especially for the European Union, as well as for developing countries (for example, African ones). Not one and two countries in Europe, including the motor on the continent Germany, are in recession. This is due to the Covid pandemic and to a lesser extent to geopolitical opposition and the disruption of global logistics chains. Economic problems, of course, did not escape China either, but to the surprise of economists and experts from around the world, it turned out that the Chinese economy is much more stable and healthy. Some Western media have been quick to conclude that unlike 2023, when China achieved a remarkable recovery and GDP growth above 5 percent, in 2024 the country will face more serious problems. But is this so? Let’s see.
At the beginning of 2023, China set itself a target of economic growth of at least five percentage points. This was surpassed and is impressive against the background of global crisis events, especially since in 2022 growth was three percent. At the same time, it must be noted that such growth is nowhere to be found among the major economies – as we have already noted, countries such as Germany are in recession. In fact, given the fact that the Eurozone had negative growth in the last quarter of last year, that means it was in recession.
Returning to China, if we compare with 2022, when the total volume of consumer goods sold in the domestic market fell by 0.2 percent, we must note that in 2023, for the same period, there was not just growth, but we can safely say boom – 7.2 percent up in sales growth.
Again in 2023, there is a growth of 6.3 percent in investment in the manufacturing and industrial industries on an annual basis, which is also impressive. Even more impressive, however, is when we learn that the electric vehicle and machinery manufacturing industry grew by a whopping 34.6 percentage points year over year. The tool and metric machine manufacturing sector has grown by 21.5 percent, automotive manufacturing by as much as 17.9 percent, and high-tech industries by as much as 10.5 percentage points in 2023.
All of these are knowledge-intensive, serious and intelligent sectors that involve highly skilled labor, engineers and specialists, and which have a high added value and export price. In other words, the Chinese economy in 2023 has seriously strengthened in the field of high technology and industry, i.e. the real economy, and has also strengthened the expansion of consumption in its domestic market.
Of course, all this is a serious positive signal to China’s international partners, both states and private entities. This signal is unequivocal – there is no way, with such strong economic parameters, the Chinese economy will suddenly begin to shrink sharply.
According to some experts, China has a very realistic chance in 2024 to repeat the economic growth of more than five percentage points. Of course, it remains to be seen, especially since there are unknown circumstances, especially related to geopolitics and the various points of tension that affect the entire world. But in any case, the growth of the Chinese economy in 2024 will be above the world average, just as it was the case in 2023.
To a large extent, China’s GDP growth depends on the policies of the Chinese government and the options and opportunities that are on the table for Chinese policymakers. Over the past decade, China has generally had no problems with inflation, but at the same time, due to its transition (gradually) from a developing to a developed economy, GDP growth has slowed. Yet it is much more intensive than in the already long-developed economies. Some Chinese experts believe that because of this, the Chinese government can undertake bold fiscal and monetary policies to stimulate the economy without worrying about inflation in the short and even medium term.
Undoubtedly, there are problems in the Chinese economy such as a slowdown in real estate investment (albeit still quite a slight slowdown), but it reflects the country’s transition to a new qualitative state. As we saw above, investments in high technologies, which are the future not only of China, but also of all humanity, are increasing.
To encourage growth, China can continue, for example, to invest in public projects and infrastructure. On the one hand, such projects do not bring a quick financial gain, but on the other hand, they generate long-term wealth, a higher quality of life and, most importantly, a high level of employment. And because of this, the Chinese authorities take extraordinary measures to ensure the high efficiency of such investments.
Another key point is a continuation of the opening-up policy strengthened by Xi Jinping, which has appealed to both domestic markets and international investors. This opening, as well as additional investment in high-tech and advanced sectors such as electric vehicles, automotive in general, artificial intelligence, robotics, nuclear energy, green energies and more, will further ensure that the lofty eventual goals for the Chinese economy are met.
A very important moment will be domestic consumption and consumer confidence of Chinese citizens. After all, China’s market is the largest in the world, and since absolute poverty has been eradicated and defeated under Xi Jinping, China’s middle class has become increasingly numerous and solvent.
Sociologists now note an increase in consumer enthusiasm for winter sports and domestic Chinese tourism, which creates the conditions for serious growth in 2024, which will affect the entire economy of the PRC. Chinese experts also predict that retail sales will grow by a minimum of five percentage points this year, with tourism and online shopping the main drivers behind this.
A significant growth in Chinese tourism, which will overall affect the economy in the first quarter of 2024, will be around the Spring Festival from February 10 to 17. Interestingly, the northeastern city of Harbin, according to Chinese media, has become an extremely popular destination recently, and travel and hotel bookings there have jumped as much as 14 times year-on-year. This is just one example, and the more popular tourist destinations in the PRC, for both Chinese and foreigners, continue to be the subject of steady interest.
A good indication in general is that during the three New Year days in China, winter tourism, including that related to winter sports, has shown significant growth. We are talking about domestic tourism, which has reached 79.73 billion yuan (over 11 billion US dollars) in a few days, which is a growth of as much as 200 percentage points.
According to Chinese institutions and statistics centers, the number of intra-China air routes and flight reservations will reach as many as 80 million by the Spring Festival, which will be 44.9 percent more than last year.
In other words, it appears that tourism and entertainment, along with, of course, high technology and government investment in infrastructure, will be the main drivers of China’s growth and the consumption that fuels that growth. When we talk about tourism, in fact, domestic Chinese tourism is expected to be higher and more intense in 2024, not just compared to the Covid period, but compared to 2019.
A good indication of consumption this year is also consumption in the past year 2023, which, according to the National Bureau of Statistics of China, reached 42.8 trillion yuan in the retail sector in the first 11 months of 2023, up 7.2 percentage points more than in 2022.
In 2023, as we have already highlighted, China showed a steady recovery after the pandemic, which in itself is a good indication of the trajectory in this year 2024 as well. There is a major boost to growth from this recovery. Another positive factor is the increase in trade turnover in 2023. According to the General Administration of Customs, in 2023 China’s trade grew by 0.2 percent year-on-year to reach 41.76 trillion yuan ($5.83 trillion), and this against the background, as we have already said, of global instability, blocked trade routes and logistics chains.
Even Western experts admit that the trajectory of China’s exports and imports, i.e. of trade, is much better than they expected a year ago. And these positions are expected to hold or even improve. For the seventh year in a row, China has maintained its position as the world’s largest trading nation.
According to the World Trade Organization (WTO), the international market share of the People’s Republic of China’s exports in 2023 is likely to remain at an extremely high level of as much as 14 percent. Here we are only talking about the share in trade, not the share of the Chinese economy in the world!
According to experts from Peking University, growth could reach 5.5 percentage points in 2024, which would reinforce the stable trajectory of the Chinese economy, despite the gloomy forecasts of anti-China Western journalists.
The emergence of new driving forces in the Chinese economy, primarily high technology and the appropriate and adaptive policies of the Xi Jinping government, will certainly improve market expectations and the performance of the Chinese economy in 2024, despite the complex macroeconomic landscape and global geopolitical issues.
China’s new growth strategy is not to be the “workshop of the world” or simply the largest exporter, but to create a fully and qualitatively innovative paradigm based on innovation, technology and opening up. The December 2023 Central Economic Work Conference held in Beijing called for efforts to make progress while maintaining stability, as well as consolidating what has been achieved so far through progress. Chinese experts and rulers from the Chinese Communist Party are convinced that the state should have a proactive fiscal policy, a prudent monetary policy, and especially strengthen innovation and coordination between the private and public sectors, as well as opening up to the world.
These things have already borne fruit with China’s impressive recovery in 2023, and are likely to bear even sweeter fruit in 2024 if all goes well. According to Chinese experts, only fiscal incentives from the party-state leadership will contribute more than 1 percentage point to economic growth. And this, in combination with other factors, strengthens the chance of achieving at least 5 percent growth in 2024.
And all this is good news for all humanity, because in the face of recession in Europe, problems in the US, wars in Ukraine, Israel/Palestine, Yemen and elsewhere, the only ray of hope for the world economy, as in 2023, so in 2024 it will probably remain China. And if more countries start to follow China’s example and follow Xi Jinping’s ideas of mutually beneficial cooperation and a global community of shared destiny, the world will probably look like a richer, more prosperous and peaceful place, but for now we are left to rely mainly on China , and to a lesser extent other international factors. The outlook for the Chinese economy in 2024 is positive, and this in itself is good news, both for Europe and especially for the developing countries of Africa and Asia, which depend on Chinese aid, investment and partnership.
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