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China’s economy shows vitality with innovative growth, booming market

CGTN – Most of the provincial regions in China held their local annual political sessions around January this year. During the local “Two Sessions” meetings, the provincial lawmakers and political advisors discussed local development plans for the new year. Over 20 regions have set their 2024 GDP growth targets at above 5 percent. 

The targets indicate local governments’ confidence in economic momentum. According to economic growth data released late last year by provincial governments across China, 17 provincial regions reported their 2023 year-on-year GDP growth rates exceeding the national increase of 5.2 percent.

Ongoing optimization of economic structure

Shifting focus from mere economic growth rates to the structure of economic growth, provinces across China are actively promoting high-end, intelligent and green manufacturing.

In their local government work reports, many provinces have highlighted the concept of “new quality” productivity. This refers to a new form of productive forces, derived from continuous science-tech breakthroughs and innovation, that propels strategic emerging industries and future industries in an increasingly intelligent and information-driven era.

Provinces are leveraging technological innovation for industrial progress, focusing on biomanufacturing, the low-altitude economy, and pioneering fields like quantum technology and life sciences. Efforts to integrate data with practical applications are also being made to bolster the digital economy. Zhejiang, for instance, targets a 9 percent increase in the added value of its core digital industries and seeks to ensure that 85 percent of major enterprises undergo digital transformation.

Likewise, several western inland provinces are looking to capitalize on their advantages in computing power to further industry digitization. For example, the Ningxia Hui Autonomous Region aims to intelligently upgrade traditional industries and empower small- and medium-sized enterprises digitally, aspiring for the digital economy to comprise over 36 percent of its regional GDP.

Additionally, fostering the development of the private sector has become a key focus. Several provinces plan to leverage financial policies to support private enterprises in major tech innovations, encourage their participation in key scientific projects, and direct private investment towards infrastructure. 

This year, Jiangsu plans to roll out specialized policies to stimulate private investment, while Guangxi is set to guide financial institutions to enhance support for first-time and credit loans to private businesses. Also, Hainan will create a fund pool to assist companies with good credit but temporary financial difficulties.

Meanwhile, provinces and municipalities like Jiangxi, Liaoning, Chongqing and Shanxi are improving their regulatory frameworks to protect investment rights. They aim to eliminate indirect barriers to market entry, ensuring a level playing field for businesses of all types.

Drawn by the improving and welcoming business environment, along with the vast consumer market, foreign-funded enterprises are confident in their long-term investment prospects in China. 

Major multinational corporations from various sectors, including KFC and Standard Chartered, have recently boosted their investments in China. The country continues to be a prime investment destination due to offering promising innovation opportunities, comprehensive industrial support and creating a conducive business environment.

In 2023, German direct investment in China increased by 4.3 percent, reaching a record high of 11.9 billion euros ($12.7 billion), according to official Bundesbank data analyzed by the IW institute. Additionally, China’s share of Germany’s total overseas investments climbed to 10.3 percent last year, marking the highest level since 2014.

Booming consumer market

Since 2023, China’s consumer market has shown robust recovery. Last year, its total retail sales reached 47.15 trillion yuan, up 7.2 percent from the previous year, according to the National Bureau of Statistics. Online retail sales saw an 11 percent increase, with physical goods’ online sales constituting 27.6 percent of the total retail sales.

The rise of new consumer models, such as e-commerce, has expanded the range of sales channels available in the consumer market, offering users a more varied experience, observed Pan Helin, a researcher at Zhejiang University.

The revitalization of the consumer market has also been reflected in the travel sector. During this year’s Spring Festival holiday, there was a high level of enthusiasm for travel. Data shows that the number of visitors to major cultural and tourism sites nationwide reached 123 million, marking a 22.8 percent increase compared to the same period in 2023.

The increased travel and cultural activities during the Spring Festival also fueled an uptick in entertainment spending, especially in the film industry. As of 1:15 p.m. Friday, box office revenue in China from the Spring Festival holiday (including pre-sale) has surpassed 7 billion yuan (approximately $983.3 million), according to Dengta Pro, the data analysis arm of China’s leading film-ticketing platform Taopiaopiao.

Pan noted that the increasing consumer demand for a higher quality of life and richer experiences signifies a shift in consumption patterns. This trend, coupled with a growing enthusiasm for shopping and leisure activities, indicates a steady recovery in China’s consumer market.

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