Confident nation greets 2020

By Chen Qingqing Source:Global Times Published: 2020/1/1 21:43:40

Chinese leaders target growth plan amid global uncertainties

People embrace the dawn of a new decade and enjoy a dragon dance at Mutianyu section of the Great Wall in Huairou district, Beijing on Wednesday. Across the country, people ushered in the year 2020 and the decade 2020s with various celebrations. Photo: China News Service

As the world greeted 2020 with countdowns and fireworks, leaders of the world's second-largest economy hailed the year as a milestone on China's road to a moderately prosperous society while Chinese analysts expressed cautious optimism amid lingering challenges. 

Chinese President Xi Jinping delivered a new year's speech in Beijing on Tuesday, pledging to achieve the first centenary goal of building a moderately prosperous society in all respects in 2020, the Xinhua News Agency reported. 

The country's GDP is expected to near 100 trillion yuan ($14.37 trillion) while its per capita GDP is expected to reach $10,000 in 2019, Xi was quoted as saying. 

Key progresses were made in efforts to forestall and defuse major risks, carry out targeted poverty alleviation, and prevent and control pollution, he said, noting that 2020 was crucial for winning the battle against poverty. 

Chinese President Xi Jinping delivers a New Year speech Tuesday evening in Beijing to ring in 2020. (Xinhua/Ju Peng)

2020 is the final year of the 13th Five-Year Plan (2016-20), the central government's blueprint for the country's social and economic development. 

The moderate slowdown in growth during 2019 reflected China shifting from high-speed to high-quality development, with looming uncertainties. 

The country's economic growth could fall below 6 percent in 2020, according to Chinese analysts, but would meet major targets set out by the development plan. 

As major institutions like the IMF improved their forecasts toward a rebound in global growth, they also asserted China's overall growth would beat expectations. 

Economic rebound 

"As China and the US are marching toward the signing of the phase one trade agreement soon, China-US trade tensions could be largely eased, injecting positive sentiment in the global economy," Zhang Yansheng, chief research fellow at the China Centre for International Economic Exchanges, a government think tank in Beijing, told the Global Times on Wednesday. 

US President Donald Trump has tweeted Tuesday that he would sign a phase one deal with China on January 15. 

Analysts said such a deal would mark a significant positive step for the prospects of a soft landing for China's economy in 2020, in addition to more efforts at deepening domestic economic restructuring. 

Some positive signs have already emerged for 2020. 

The official manufacturing index expanded for the second straight month in December, reflecting a recovery in factory activity amid the yearlong trade war. 

"It also indicates that the overall growth of industrial production and business activities will remain positive in the first half of 2020," Zhang said, "And the fundamentals that support the country's sound long-term economic growth remain changed."

China faces mounting downward and external pressures in 2019 that heavily weigh on future growth. 

People visit the Great Wall to celebrate the New Year in Beijing, capital of China, Jan. 1, 2020. (Xinhua/Ju Huanzong)

As part of the country's continuing opening-up, authorities say they have been reforming and improving the business environment by granting more market access to foreign companies and improving the import system. 

They also pledged to support private Chinese firms using monetary tools and flexible policies to maintain market liquidity.

"China's economy is expected to become more resilient despite the slowdown," the chief research fellow said. 

"Major concerns will be whether individuals and enterprises could share the dividends of the high-quality growth or see growing polarization."

Swans and rhinos   

US-China tensions had made some foreign media depict 2019 as an anxious year for China, while Chinese analysts have warned against "black swan" and "gray rhino" events - unforeseen crises or ones arising from obvious but neglected problems - that could hurt China's growth. 

Over the past decade, China's growth into a major world economy has made it a participant in certain global frictions, Da Wei, assistant president of the University of International Relations in Beijing, told the Global Times on Wednesday. 

"Some may raise concerns over what will be the next 'gray rhino' event like the Hong Kong unrest," he said.

Da said he was cautiously optimistic facing down a rhino or a swan. 

"Considering the country's large size, even if the external situation becomes more complex and serious, as long as we don't make serious mistakes, the impact of the external environment won't be fatal," he said. 

Chinese mainland analysts noted the uncertain 2020 Taiwan regional leadership election may escalate the cross-Straits relationship into fiercer confrontation and cast a shadow on neighborly development. 

China's reform experiences and stable political system made the country more resilient in a slowing economy, Da noted, while sustainable innovation-driven growth could help China tackle growing pressure. 

Another major uncertainty weighing on the country's growth is China-US relations, as Washington gears up for the 2020 presidential election. 

"China-related issues will dominate the US election campaign and how to properly handle relations between China and the US will also weigh on China's future development," Yang Xiyu, a senior research fellow at the China Institute of International Studies in Beijing, told the Global Times on Wednesday. 

China should remain cautious toward the next decade by avoiding the middle-income trap, delivering on domestic economic restructuring and properly handling relations to avoid the Thucydides trap, he said.

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