China's economy has momentum to sustain growth
- By Mo Kaiwei
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E-mail China.org.cn, April 15, 2016
With ongoing streamlining of administrative procedures and the transformation of government functions, a market-oriented economy is taking shape which is conducive to providing a business-friendly environment and reenergizing the economy.
China is a big country with huge potential and economic resilience. The ongoing industrialization, information development, urbanization and agricultural modernization give the country what it takes to release pent-up domestic demands.
As China is encouraging mass entrepreneurship and innovation as well as boosting the old-age care industry and tourism with a series of fiscal and taxation measures, consumption in information, culture and healthcare sectors will be stimulated and new growth areas will also expand.
More importantly, the country's ongoing structural reform is generating more benefits and the market is playing a more decisive role in resource allocation. Cutting overcapacity and excess inventory, deleveraging, reducing costs, and strengthening points of weakness, which are the five major tasks for China's economy in 2016, will be conducive to sustained and quality growth.
From a global perspective, China's inclusion to the world economy is generating optimism; trade with ASEAN countries is steadily improving, high-speed railway projects are making breakthroughs and the Asian Infrastructure Investment Bank (AIIB) has been founded to create favorable conditions for the "Belt and Road" initiative.
However, to maintain a sound momentum for growth, the Chinese government needs to implement a proactive fiscal policy and a moderately easy monetary policy to provide liquidity for brick and mortar businesses and reduce their costs.
Economic reform measures, especially those in state-owned enterprises (SOEs), need to speed up and become better positioned for international competition.
Moreover, related government agencies should follow closely on potential interest hikes in the U.S. Federal Reserve and keep their negative impact at bay concerning the Renminbi exchange rate.
Mo Kaiwei is a current affair commentator with china.com.cn.
The article was translated by Guo Yiming. Its original version was published in Chinese.
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.
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