China Reforms to Strengthen Economy

Chinese Commerce Minister Wang Wentao, in an interview with Xinhua, vowed more measures to expand consumption and stabilize foreign trade and investment in an effort to promote a sustained economic recovery.

CONSUMPTION, STRONGER GROWTH DRIVER

China's consumption has seen both a steady recovery and strengthened momentum this year, with retail sales of consumer goods up 2.5 percent, 4.6 percent and 5.5 percent year on year in July, August and September, respectively.

Consumption has become stronger as the primary economic driver, Wang said, predicting that the momentum will continue in the fourth quarter.

But Wang also acknowledged that the consumption recovery is still imbalanced and that consumer sentiment has room for further improvement.

China will move to consolidate the upward trend, Wang said, noting that the focus will be on stimulating the purchasing of cars, home appliances, and furniture, as well as consumption in the catering sector.

Efforts will be made to increase sales of new energy vehicles in rural areas, support the development of motorsports and recreational vehicle camping, and promote green and intelligent shifts in home appliances, Wang said.

RESILIENT TRADE

Despite an unstable global economic recovery, China's foreign trade showed strong resilience and remained stable thanks to an array of government policies that support the development of overseas warehouses, the processing trade, and new energy vehicle exports, Wang said.

"Imports and exports combined totaled 30 trillion yuan (4.18 trillion U.S. dollars) in the first three quarters, basically equal to the same period last year, and the number of enterprises with real trade business increased to 597,000, close to the level of the entire 2022," Wang said.

Wang cited several bright spots, including robust trade in September, fast trade growth with Belt and Road participating countries, and improving exports to the United States and European countries. Moreover, the exports of electric vehicles, lithium-ion batteries, and solar batteries surged, cross-border e-commerce remained vibrant, and digital and services trade grew rapidly.

Looking at the fourth quarter of the year, Wang said a series of expos will help businesses explore overseas markets. Wang also vowed to step up credit support for micro, small and medium-sized enterprises.

China will accelerate the roll-out of negative lists for services trade and unveil more policies on digital trade reform and innovation, he added.

WIDER OPENING UP

While global cross-border investment remained sluggish this year, China has carried out new measures to attract foreign investment, including stronger support for foreign businesses in setting up innovation centers and investing in the manufacturing sector.

Foreign investment in China's high-tech manufacturing sector climbed 12.8 percent year on year in the first three quarters of 2023, while such investment in research and development and design services went up by 10.2 percent. In this period, some 38,000 new foreign-funded businesses were set up in China, an increase of 32.4 percent compared with a year earlier.

Many executives of multinationals visiting China this year expressed optimism about the Chinese market, which has a huge size, strong innovation vitality and an improved business environment, Wang said.

Wang pledged continued efforts to deepen reform and opening up and further improve the business environment.

China will reduce the negative list for foreign investment, remove all restrictions on foreign investment in the manufacturing sector, and open up more service sectors such as telecommunications and tourism, the minister said.

"We will effectively solve the difficulties and problems encountered by foreign enterprises, so that they not only have confidence in investing in China, but also can feel at ease to take root here," Wang said.

Shayne Heffernan