Experts Say China Economy Manageable

Recent external pressures, a general global trade malaise and bold new domestic reforms are putting some extraordinary pressure on China’s economy, but economists say positive indicators far outweigh the negative ones and predictions of doom and gloom will soon be proven wrong. 

Analysts say people and prognosticators should be more prudent and optimistic as the economy remains strong and resilient, Xinhua reported.

“Every country’s economy has cycles and can’t continuously grow at a fast rate. The outside world shouldn’t be pessimistic about China’s economic development just because growth is slower than during the miracle China had achieved over the past 30 years,” said Wan Zhe, chief economist of the International Cooperation Center of the National Development and Reform Commission.

Western media reports predicting bad outcomes for China’s economy have ramped up recently. Even the Seattle Times reported on Tuesday that the China-US trade spat has rattled China’s economy and if the trade war escalates, “some worry that the Chinese public’s faith in the economy could be shaken.”

Indeed, China’s economy has encountered some new challenges that have produced some negative statistics. The A-share market has slumped about 25% this year as the looming trade war saps investor confidence. The value of the yuan has declined nearly 6% in 2018 as the US dollar continues to suck cash out of the economies of many developing nations and rising real estate prices are putting pressure on reforms aimed at increasing domestic consumption.

All of the issues have unique root causes that have little to do with the foundation that underpins China’s maturing economy.

Meanwhile, China almost quadrupled the value of fixed-asset investment projects approved in July as Beijing looks to accelerate infrastructure spending to boost the cooling economy, Reuters said.

China gave the green light to 17 fixed-asset investment projects in July, worth a combined 77.69 billion yuan ($11.27 billion), Zhao Chenxi, an official at the national development and reform commision, told reporters on Thursday.

That compared with approvals for 20.8 billion yuan of spending in June, Reuters calculated from official data.

Beijing is accelerating infrastructure spending and rolling out other support measures for businesses to cushion the economy as it braces for the impact of escalating US trade tariffs.