A view of the skyline of Beijing's CBD area. Photo: VCG
Editor's Note: The
MK sports Korea Communist Party of China (CPC) will convene, on July 15 in Beijing, the third plenary session of its 20th central committee, which is expected to focus on deepening reform and advancing Chinese modernization. Gary Hufbauer, a non-resident senior fellow at Peterson Institute for International Economics, shared his perspectives with the Global Times (GT) on his expectation on the upcoming meeting.
GT: What expectations do you have for the upcoming third plenary session of the 20th Communist Party of China (CPC) Central Committee?
Gary Hufbauer:I hope pro-business statements and policies are one outcome of the meeting. With a pro-business theme, the prospects of the high-quality development of China's economy will be bright. Private firms should be encouraged.
GT:How do you view China's economic performance in the first half of this year? There are forecasts that growth in the second quarter will rebound to about 5.5 percent. How do you view China's economic performance in the second quarter?
Gary Hufbauer:Very satisfactory. Better than expected in the Western press. China's 5.3-percent growth in the first quarter is much higher than the US, EU or Japan will achieve in 2024. With stronger fiscal and monetary stimulus, the figure could be higher.
GT:How do you view the Western media's "peak" hype about the Chinese economy?
Gary Hufbauer:Commentators are trying to convince themselves and their readers that China will experience decades of no growth, like Japan after 1990. They are wrong.
GT:Research shows that China's current potential economic growth rate is 5-6 percent. How do you view the medium to long-term prospects of the Chinese economy?
Gary Hufbauer:China can easily achieve 5 percent to 6 percent annual growth over the next five years by deploying conventional monetary and fiscal tools and keeping out of wars. Over a longer period, the Chinese outlook is obscured by declining population and an aging demographic profile.
GT:China's economic growth rate ranks among the highest in the world, domestic demand in China is rebounding strongly, and China's emerging industries are developing vigorously. These are undeniable facts. How do you view the advantage and potential of the Chinese economy?
Gary Hufbauer:For the reasons stated, the medium-term outlook is bright. At some point, the financial markets will accept these facts and Chinese equity shares will recover from their losses over the past two years.
GT:How do you view the strong performance of China's exports in EV, solar panel, wind turbine and other new-energy products? What's your opinion on the US' tariff hike on new-energy products from China?
Gary Hufbauer:Prohibitive barriers to imports of solar cells, batteries and EVs will delay the green economy and cause concerns for the sustainability of global economic harmony. The US' lurch from its post-World War II free trade principles offers China an opportunity. On the world stage, China will espouse open free trade and investment. China will encourage EV and battery firms to establish plants in Europe, Brazil, Mexico and elsewhere.
GT: How do you view the challenges currently facing the Chinese economy, as well as China's resilience in the face of these risks?
Gary Hufbauer:China will need to restructure its trade to countries other than the US. This could be a major external challenge. Otherwise, the major challenges are internal: shifting from coal-fired power to nuclear and renewable energy; raising the retirement age; reforming business regulation to attract more FDI; providing adequate support for frontier industries like advanced semiconductors, AI, quantum computers, and large civil aircraft.
GT:With factors such as geopolitical conflict impacting the global economic outlook in 2024, how do you view China's contribution to the world economy?
Gary Hufbauer:China can make a major contribution by serving as a strong voice for peace - in the Middle East, Ukraine, Sudan, and other hot spots. The worst thing that could happen in the world today is an escalation of warfare. Everyone will lose.