China’s economic outlook in the lead-up to the 19th National Congress of the Communist Party of China (CPC) in October is “very positive,” a leading Australian economist has said.
“China’s economy is still growing at a pretty rapid rate and it is on target to double GDP (gross domestic product) by 2020,” James Laurenceson, a professor from the Australia-China Relations Institute at the University of Technology Sydney, told Xinhua in a recent interview.
He said one of the main challenges facing the CPC five years ago was to simply keep the surging levels of economic growth going.
There was then “a lot of talk about free market reforms and letting the market play a more decisive role in allocating resources in the Chinese economy,” Laurenceson said. “Overall I think it has gone to plan.”
On the demand side of the economy, consumption by Chinese households has been responsible for two thirds of Chinese growth.
“Right now consumer confidence in China is at a multi-year high, so I am not seeing any hard-landing scenario for China’s economy,” Laurenceson said. “Chinese businesses are pretty positive as well.”
On the production side of the economy, wide-scale structural changes have seen China’s services sector expand dramatically to account for 52 percent of the GDP, as the country transitions from manufacturing.
“That works for Australia very well,” Laurenceson said.
“China is demanding more of Australia’s natural resources than ever before, that demand hasn’t dried up, but at the same time because of the rise of consumption and because of the rise of the services sector, we are seeing new opportunities for Australian companies to open up as well,” he said.
“Agriculture, tourism, education, all these things are booming at the moment and the Australian government would be delighted if that continued and that’s what the Chinese government wants to,” the professor said.
Laurenceson predicted that innovation may also play a big role in how China’s economy performs in the coming years.
“Five years ago there was some talk about whether innovation could really happen in China,” he said.
“The reality is that in many sectors of the economy, e-commerce for example, China is leading the world in those areas, it’s not catching up anymore.”
“So I think we’ve got some good evidence that productivity growth in China is continuing and for the long run that leaves me to feel pretty confident, even though there may be some ups and downs in between,” Laurenceson said.