China on track for 'high-quality development' in 2018
In a few days, China's annual sessions of top legislative and political advisory bodies will open a window for the world to gain an insight into the country's economic transition in the coming decades -- a drive toward "high-quality development."
During the meetings starting early March, national legislators and political advisers will review and discuss specific measures designed to push the economy to steadier and greener growth.
"China's economy has been transitioning from a phase of rapid growth to a stage of high-quality development," said the report delivered to the 19th Communist Party of China National Congress in October. "This is a pivotal stage for transforming our growth model, improving our economic structure, and fostering new drivers of growth."
What does the new growth pattern mean for China and the world? What should global businesses and investors anticipate with the economic shift? The upcoming meetings, known as "Two Sessions," are about to shed new light on such questions.
More Stable Growth
China's growth target, expected to be released in the government work report during the two sessions, will continue to attract worldwide attention this year. The closely watched figure had remained stable during the past five years as policy makers put stronger emphasis on quality and became more tolerable to GDP slowdown.
Economists expect China to maintain the near 6.5-percent reading this year as part of the efforts to improve economic quality and performance. In fact, some provincial authorities have softened their goals during local sessions in January.
Although it has bid farewell to breakneck expansion, China will continue its role of stabilizing the global economy.
World Bank data has showed that China contributed 34 percent to world economic growth from 2012 to 2016, more than that of the United States, European Union and Japan combined.
Lian Ping, an economist with the Bank of Communications, said the economy would be more stable this year with less quarter-to-quarter volatility in GDP increases as consumption has overtaken investment to be the main economic driver.
Along with other economic policies written into the government work report, the annual growth target is subject to approval of the top legislature, which, along with the top advisory body, plays an important part in shaping national policies from employment to environment.
Free trade will be another hot topic during the two sessions as China's high-quality development will create an enormous consumer market causing huge demand for products from the rest of the world.
With the country's first free trade zone, Shanghai is on the forefront of foreign trade and is still looking for more opportunities.
Ying Yong, national legislator and mayor of Shanghai, said during local sessions that the city will push its FTZ to meet the highest international standards and will grope for ways to develop the "free trade port," an area that features minimized trade control measures.
The Ministry of Commerce forecast last November China would import more than US$10 trillion of goods and services in the next five years.
On the back of the booming imports is China's rising middle-income group, which, with a population of around 300 million, accounts for 30 percent of the world's total. The influence has been reflected in their increasingly bigger role in driving growth and trade.
China will make more efforts to cut tariffs on products including cars, senior Chinese official Liu He said at the World Economic Forum annual meeting in January. Import taxes on 187 products were slashed last year, with the average rate down from 17.3 percent to 7.7 percent.
The first China International Import Expo will be held in Shanghai in November, which is expected to bring together thousands of enterprises from more than 100 countries.
Broader Market Access
As China will mark the 40th anniversary of its reform and opening up this year, analysts expect more specific measures to widen market access for global businesses during the two sessions.
At the WEF meeting, Liu said China would make more efforts to further open the country's finance, manufacturing and service sectors, and step up protection of intellectual property.
The negative list that determines where foreign participation is prohibited or limited will become shorter. Foreign firms will continue to receive equal treatment, with their interests well protected. The Belt and Road Initiative will be pushed forward, with the focus on international industrial cooperation.
Foreign direct investment in the Chinese mainland hit an all-time high of 878 billion yuan (US$140 billion) last year against a backdrop of lackluster global investment, and 35,652 foreign-funded businesses were established.
China's central bank on Monday announced a decision to abolish old regulations, to smooth operation of foreign-funded businesses, while another banking regulator also rolled out measures during the weekend to cut red tape for foreign lenders.
Observers have said the country's resolution to further integrate into the global economy is evident.
Despite the rising protectionism in major economies, China will champion "a community with a shared future for humanity," and further promote globalization, according to Wei Jianguo, vice president of the China Center for International Economic Exchanges.