China's GDP Tops CNY90 Trillion for First Time, Provides 30% of Worldwide Growth
Dong Xin | Feng Yunqing
DATE:  Jan 23 2019
/ SOURCE:  yicai
China's GDP Tops CNY90 Trillion for First Time, Provides 30% of Worldwide Growth China's GDP Tops CNY90 Trillion for First Time, Provides 30% of Worldwide Growth

(Yicai Global) Jan. 22 -- China's gross domestic product exceeded CNY90 trillion (USD13.23 trillion) for the first time last year, and at a 6.6 percent clip it accounted for almost 30 percent of global economic growth, official data showed yesterday.

The country remained the largest contributor to worldwide economic expansion despite uncertainties over a weakening global recovery and a rise in trade protectionism and unilateralism. China continued to be the 'locomotive' of the world economy and the spillover effect of its economic growth is gradually increasing.

GDP reached CNY90.03 trillion in 2018, according to data released by the National Bureau of Statistics, even as financial markets and commodity prices fluctuated drastically, global investment fell sharply, and trade protectionism and unilateralism prevailed. These factors made it difficult for China to maintain its economic operation within a reasonable range, said NBS Director Ning Jizhe.

More than two years of supply-side reforms have made the country's economic structure more reasonable and reduced systemic risks, improving economic resilience and risk resistance. The country further enhanced fiscal policy support based on moderately loose monetary policies last July, stabilizing growth, Zhang Jun, chief economist at Morgan Stanley Huaxin Securities, told Yicai Global.

Added Value

China's macro economy showed a slowing trend last year but achieved its growth target. Manufacturing investment, especially high-end manufacturing and private investment, played a positive supporting role, Liu Zhe, deputy dean of the Wanbo New Economic Research Institute, said in an interview with Yicai Global. The rapid development of new sectors was one of last year's highlights, he added.

The added value of industries above a designated size jumped 6.2 percent annually, among which high-tech manufacturing climbed 11.7 percent, strategic emerging industries rose 8.9 percent, and equipment manufacturing gained 8.1 percent, the NBS data show.

Zhang believes consumption is one of the main driving forces of China's economic growth. As the world's largest consumer market, China's potential is obvious to all. Vast rural and low-income groups demand rising consumption, while urban and middle-income citizens tend to shift from consumption of goods to services, all of which are driving forces for sustainable consumption-led growth.

Consumption expenditure accounted for 76.2 percent of GDP growth last year, an annual gain of 18.6 percentage points, the data show.

World Leader

The Chinese economy contributed nearly 30 percent to the world's economic expansion, remaining the single largest contributor, Ning said.

Growth has averaged 9.5 percent a year over the past 40 years of reform and opening-up, and the country is now the world's second-largest economy. China's GDP accounted for about 16 percent of the world total. It has contributed about 30 percent of global economic growth in the past 10 years, with the number reaching 40 percent for two consecutive years during the 2008 financial crisis, playing a decisive role in stabilizing the global economy, Xu Guangrui, executive director of Guoxin Future Science and Technology Research Institute, said in an interview with Yicai Global.

The spillover effects of China's economic growth have gradually increased, and the country continues to promote global economic integration through cooperation such as the Belt and Road Initiative while maintaining its own rapid growth. Global economic integration is an important force powering world growth, Huaxin Securities' Zhang said.

China opened its huge consumer market to other countries by holding the first China International Import Expo last year, which is strong support for a global economy facing a growth turning point and weak demand, Zhang added.

Record Trade

China's imports and exports hit a record high last year. Two-way trade totaled CNY30.51 trillion, up 9.7 percent annually. Exports rose 7.1 percent to CNY16.42 trillion, while imports jumped 12.9 percent to CNY14.09 trillion.

Xu said that more than 230 countries and regions have become China's trading partners. Exports to the US grew 11.3 percent annually last year despite their trade dispute, suggesting that China's commodities have a strong advantage.

In 2018, China's trade with the European Union, the US and the Association of Southeast Asian Nations gained 7.9 percent, 5.7 percent and 11.2 percent, respectively, NBS data shows.

The potential for trade cooperation between China and countries and regions along the Belt and Road is being unleashed, which has gradually become a new driving force for foreign trade. China's trade with countries and regions along the BRI amounted to CNY8.37 trillion last year, up 13.3 percent, Xu said.

Growth Potential

China still has greater growth potential after years of stable expansion and will share the dividend with countries around the world, according to economists contacted by Yicai Global.

China will continue to ease macroeconomic regulations and control and give more play to the market, Xu said, adding that China's efforts in opening up are bound to add more energy to the global economy.

The continuous advance of urbanization and infrastructure building, the ongoing expansion of the consumer market, and high-quality growth brought by focusing on scientific and technological innovation have all created enormous space for China's development in the coming years, Xu said, adding that more than 82 percent of residents in developed economies such as the US and the UK lived in cities and towns last year.

The share in Japan was even higher, standing at 91.6 percent, while the ratio in China was less than 60 percent, which means the country still has a development space of 20 to 30 percentage points.

China has the foundation, the condition, the confidence and the ability to keep the economy operating within a reasonable range this year and realize a sustained and sound economic development, the National Bureau of Statistics' Ning said, commenting on future economic development.

He also pointed out that an accelerating upgrade in economic structure, improving capability in science, technology and innovation, deepening reforms and opening-up along with accelerated green development also enrich the growth opportunities. Meanwhile, advantages, including being the world's most-promising consumer market, guarantee China's economic development.

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Keywords:   GDP,Macroeconomy