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A crude oil tanker is shown at Qingdao Port, Shandong province, China. File photo: REUTERS/JASON LEE
A crude oil tanker is shown at Qingdao Port, Shandong province, China. File photo: REUTERS/JASON LEE

A few days ago China’s National Bureau of Statistics released data on the performance of the Chinese economy in the first quarter of 2022. The new information dispels the international community's doubts about the Chinese economy and provides much-needed heat for the world economy in a winter of recovery.

The Chinese economy is performing smoothly. The GDP for the first quarter was more than 27-trillion RMB, up 4.8% year on year and ranking the highest among the world's major economies. The value-added of industries above a designated scale grew by 6.5%, a growth rate that is 2.6 percentage points higher than the previous quarter. The consumer price index (CPI) rose by 1.1%, which is below the target of 3%. The national surveyed urban unemployment rate averaged 5.5%, which is on a par with the same period in 2021. Foreign exchange reserves remained stable at about $3.2-trillion. Imports and exports of goods grew 7.5% and 13.4% respectively, and paid-in foreign investment increased by 25.6%.

The Chinese economy is driven more by innovation. The value-added for hi-tech and equipment manufacturing industries increased by 14.2% and 8.1% respectively. The value-added of the information transmission, software and IT service industry increased 10.8%. The value-added of consumer goods manufacturing industry increased 8.1%. Online retail sales of physical goods grew 8.8%. This number continues to grow from an already high base and now accounts for 23.2% of China’s total retail sales of consumer goods.

The output of new energy vehicles and solar cells increased 140.8% and 24.3% respectively. The share of clean energy consumption such as natural gas, water, nuclear and wind power increased 0.8 of a percentage point over the previous year, and energy consumption each 10,000 yuan of GDP decreased by 2.3%.

China maintains a reasonable policy orientation in managing the macro economy. Faced with changes unseen in a century of changes and a major pandemic, China’s economic policy is anchored by a principle of stability and steady progress. The focus has been on a balance between Covid-19 response and socioeconomic development. Cross- and countercyclical adjustments with macro policies have been strengthened. Consistent efforts have been made in various areas including stronger employment, consumption, investment, openness and people’s livelihoods.

Efforts on all these fronts helped ensure that on a general note the Chinese economy in 2022 is off to a sound start. China’s CPI rose 1.5% in March. The general price levels remained stable, which provides more room for proactive macro policies. The fiscal deficit identified in China's government budget for 2022 is only about 2.8% of GDP. The pressure on fiscal spending is relatively small, which left some room for further adjustment as government delivers relevant policies.

China’s economic development will continue to benefit African countries, including SA. China is now the world’s second-largest economy, number one trader in goods, number one manufacturing powerhouse, holder of the largest foreign exchange reserves, the second-largest consumer market and the recipient of the second-largest foreign direct investment (FDI) inflows. An International Financial Forum (IFF) report forecasts that China will remain the largest contributor to global economic growth, accounting for 26.3% of world growth in 2021.

China has remained Africa's top trading partner for 12 consecutive years. China is also a major source of FDI for Africa. In the first quarter data from the General Administration of Customs of China showed that China-Africa trade reached $64.86bn, up 23%. Among this volume China's exports to Africa totalled $35.16bn, up 18.2%, and China's imports from Africa reached $29.69bn, up 29.3%. Trade between China and SA reached $12.29bn, up 13.5%. China's exports to SA topped $5.28bn, up 23.7%, while China's imports from SA reached $7.01bn, up 6.9%.

Covid-19 and the Ukraine situation do pose increased risks and challenges. For countries including SA there is more complexity, severity and uncertainty in economic development. New challenges are also there in terms of pursuing stable growth, steady employment and stable prices. China will fully apply its new development philosophy, accelerate the establishment of a new development paradigm, and redouble efforts for high-quality development.

No matter how the world will change, China’s faith in and its commitment to reform and opening up will not waver. China will expand high-standard opening up, fully implement the negative list for foreign investment, expand the encouraged catalogue for FDI, improve services for investment promotion, and add more cities to the comprehensive pilot programme for service sector opening.

The fundamentals of the Chinese economy — its resilience, enormous potential, vast room for manoeuvre and long-term sustainability — remain unchanged. They will provide great dynamism for the stability and recovery of the world economy and broader market opportunities for all countries. That also means more benefits will be provided for people of all countries, including SA.

• Chen is Chinese ambassador to SA.

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