China on path toward stable economic recovery: Global Times

By Al Mayadeen English
Source: Global Times
12 Aug 2023 11:00

The Global Times says China is on its path toward stable economic recovery as the country emerges from economic woes and re-establishes itself on the global arena as the United States tries to undermine its economic recovery.

Containers coming from China are piled in the harbor in Hamburg, Germany, October 26, 2022 (AP)

The United States on Thursday announced that it was restricting US investments in numerous high-tech industries in China in a bid to tighten the noose around Beijing's neck, especially as President Joe Biden came out after the decision and claimed the Asian giant was "a ticking time bomb" because of its economic challenges and "weak growth". However, Chinese experts on Friday disputed these claims, saying Biden made these statements in order to distract the US public from domestic issues and gain political benefits for his presidential campaign.

The experts underlined that there was no easing of Sino-US ties despite recent exchanges between senior officials, going on to underline that the US is not likely to change its foreign policy on issues such as the Taiwan question, the South China Sea, and the economy and trade, especially when it comes to the high-tech sector, suggesting that the US approach to China on these issues is likely to be more and more aggressive with time.

"China is in trouble," Biden said Thursday. "They have got some problems. That's not good because when bad folks have problems, they do bad things," he added, claiming he did not seek to hurt China and instead was in pursuit of rationality when it came to their bilateral ties.

Biden's assertion of China's economic difficulties and unsustainable growth is influenced by the US's view of China as a strategic rival, the Global Times reported, citing the deputy director of the Center for American Studies at Fudan University, Xin Qiang.

The expert stressed that the reason Biden is attacking and demeaning China is his belief that doing so would highlight how he is capable of enhancing the US economy and sow confidence among American citizens in pursuit of a second term.

US presidential candidates often emphasize China-related issues during campaigns to divert attention from domestic problems like abortion, guns, and drugs, Xin highlighted.

The Chinese expert went on to criticize Biden's comments as a diplomatic error stemming from US political issues, potentially harming the US's reputation.

Sun Chenghao, a fellow and head of the US-EU program at the Center for International Security and Strategy at Tsinghua University, warned that such negative portrayals of China could adversely affect the global economy.

Meanwhile, Zhou Mi, a senior research fellow with the Chinese Academy of International Trade and Economic Cooperation, underlined that China's economic recovery speed took the lead among major economies, even contributing to economic recovery in other countries and the whole world through its strong rebound in Q1 and Q2 of 2023.

The Chinese government is proactively leveraging policies to enhance its economy, promoting consumption, and supporting the private sector all in light of external challenges.

Beijing's response to the economic issues the country is facing and its measures, all in all, have contributed to improved market expectations, evidenced by China's manufacturing PMI rising to 49.3 in July, as per official data.

Despite a 0.3% year-on-year decline in China's CPI for July, the country's money supply remains robust, and experts like Ming Ming, a chief economist at CITIC Securities, assert that there's no risk of deflation. The country's current inflation weakness is attributed to temporary price drops and demand-supply imbalances during the economic recovery, which can be mitigated through appropriately relaxed monetary and fiscal policies.

While some Western media outlets have propagated notions of China's deflation, experts argue this is an exaggeration, as deflation involves continuous price declines and decreased money supply, usually linked to an economic downturn.

Zhou refuted these claims while criticizing the US for its unsustainable economic indicators achieved by undermining global trade rules and suppressing other nations' development potential. The US faces concerns over its mounting federal debt, with credit rating agencies like Fitch downgrading its debt rating due to governance standards deterioration and strains in the banking sector.

Sun, on the other hand, highlights the need for cooperation between China and the US, especially in macroeconomic policy coordination and global economic governance, to address challenges. He cautions that further "decoupling" attempts by the US from China could exacerbate issues for both nations.

Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, expressed optimism about the Chinese economy's recovery trajectory, citing the effectiveness of recent policy measures in stabilizing confidence. He emphasized the importance of earnest policy implementation for sustained improvement.

China is also taking steps to support debt-laden real estate developers to ensure timely home deliveries, with over 1.65 million presale homes delivered since the "ensuring timely delivery of presale housing" initiative launched in July 2022. The China Securities Regulatory Commission held discussions with top developers and financial institutions to address debt and home sales issues while seeking funding advice.

As China's economy recovers and challenges mount for the US economy, global investors are increasingly investing in China's financial markets.

In July, foreign investors injected $3 billion into China's debt market, marking the first net inflow of funds this year. Standard Chartered reported a significant rise in pre-tax profits from its China business, attributing the Chinese market as a major revenue contributor. UBS also expressed positivity toward Chinese stocks in a recent report, citing consumption-boosting measures as a driving factor.