China set for steady growth next year

Visitors view tropical fruits at the 2023 China (Hainan) International Tropical Agricultural Products Winter Trade Fair in Haikou, South China's Hainan province, Dec 14, 2023. [Photo/VCG]

China's economy is poised for steady growth in 2024 amid continuing recovery in consumption and services as well as the country's strengthened export competitiveness, senior experts said.

In the longer term, they said China is capable of becoming a high-income economy thanks to its strength in manufacturing and high-tech sectors and its ongoing reform efforts to enhance productivity.

The steady economic outlook, a vast domestic market and the country's deepening opening-up agenda would all sharpen the appeal of the Chinese market to global enterprises, making it a regrettable choice for a foreign business if it does not invest in China, they added.

Wei Jianguo, former vice-minister of commerce and vice-chairman of the China Center for International Economic Exchanges, said he expects China's economic momentum to further strengthen next year as the fallout of COVID-19 fades and various stimulus policies jointly generate effects.

China may achieve a GDP growth of around 6 percent year-on-year in 2024, with consumption further recovering, investment remaining buoyed and external demand for Chinese goods improving, Wei said while addressing the CEO: Growing with China forum, hosted by China Daily on Monday.

Underpinning China's exports would be the country's growing competitiveness in high-tech sectors and electromechanical products, which would help the country counter external headwinds, Wei added.

China's export growth turned positive at 0.5 percent year-on-year in dollar terms in November amid a broader pickup in economic activity as retail sales, services activity and industrial output accelerated, official data showed.

Addressing the same event, Safdar Parvez, Asian Development Bank's country director for China, said ADB forecasts that China's economic growth will remain steady at 4.5 percent in 2024, versus 5.2 percent this year, supported by a continuous recovery of the services sector and efforts to expand domestic demand, particularly consumption.

"There is room for continued accommodative monetary and fiscal policies to support this growth level."

Parvez said he has "very little doubt" that China will be able to avoid the middle-income trap as the country has strong, sophisticated manufacturing and high-tech sectors.

The middle-income trap refers to economies stagnating at middle-income levels and failing to graduate to high-income economies.

More efforts can be made in China to attract foreign investment in high-tech sectors and improve productivity levels, Parvez said, making it an encouraging sign that China's top leadership has stressed the importance of opening-up at recent key meetings.

The Central Economic Work Conference has called for efforts to expand high-level opening-up, including relaxing market access in telecommunications and healthcare sectors, making it easy for foreigners to do business, study and travel in China and solving problems related to cross-border flow of data.

Wei, former vice-minister of commerce, said the major challenge facing China's opening-up drive lies in aligning domestic regulation more with international practices, such as when it comes to facilitating the adoption of foreign drugs and medical services.

He added that China's advancements in high-level opening-up and a vast domestic market with a 1.4 billion population provide global enterprises with investment opportunities in a wide range of sectors such as consumer goods, chips and the digital economy.

Wei said: "If an enterprise, especially a foreign-funded one, fails to recognize and seize the opportunities brought by China's huge market, not building factories or making additional investments here, someday it will come to regret it deeply."

In the financial sector, Peter Ling-Vannerus, chief representative of SEB Beijing, said opportunities are abundant for European banks in the Chinese market regarding asset and pension management as well as transition finance. SEB is a northern European financial services group.

Yet he said there remains scope for China's local governments to provide a more foreseeable business environment regarding cybersecurity to attract foreign investment.

Liu Zhihua and Liu Zizheng contributed to this story.