China and the World in the New Era

Fourth, China is more optimistic about technological innovation. The United States and China have the greatest potential to develop disruptive technology breakthroughs that will have a global impact, according to surveys by Bloomberg and KPMG. China is more optimistic about technological innovation, arguing that technology promotes the shaping of a better world, which is why China has been able to catch up with and surpass Western countries in some areas of technology.

In the future, China will become more prominent in its role as a stabilizing force and power source. Currently, the world economy lacks momentum for growth, and the solidity of the Chinese economy is becoming more and more important to the world. China's economy is changing from high-speed growth to high-quality development, and new industrialization, information technology application, urbanization and agricultural modernization are gathering speed. The economic structure is undergoing a profound adjustment, industrial upgrading is continuing, and new economic growth areas are constantly emerging. The urbanization rate of permanent residents reached 59.6 percent in 2018 and will increase steadily. The number of permanent urban residents will continue to increase. This will bring a wide range of needs in various areas, such as infrastructure, real estate, new retail, medical treatment and public health, education, culture and entertainment, and provide an important engine for economic development. New industries and business forms are emerging. In 2018, the added value of high-tech manufacturing increased by 11.7 percent over the previous year. Corresponding figures for strategic emerging industries and equipment manufacturing were 8.9 percent and 8.1 percent. New energy vehicles, intelligent televisions, lithium-ion batteries and integrated circuits increased by 66.2, 17.7, 12.9 and 11.2 percent, respectively. The growth rate of the information service industry is as high as 30.7 percent, and the growth rate of mobile games, online shopping, ride-sharing platforms, travel platforms, big data cloud computing and other sub-industries is 30 to 50 percent. Each sub-industry has given birth to a number of "unicorn" enterprises. According to an MGI report, by 2040, the integration between China and the rest of the world is expected to drive economic value of US$22 trillion to US$37 trillion, equivalent to 15 to 26 percent of global GDP. Strengthened cooperation between China and other countries will create enormous economic value.

China's economy and the world economy have undergone structural changes and are deeply integrated. China, which has a more stable economy, higher quality of growth, and promising growth prospects, contributes to the development of the world economy in the long run (see Box 6). It is both unrealistic and harmful to regard China's economic development as a "threat" or "challenge" and try to squeeze China out of the global industrial chain, supply chain and value chain so as to "detach" China from the world economy.

Box 6 International Institutions Are Optimistic About China's Economic Prospects

On July 4, 2019, Moody's, an international credit rating agency, confirmed China's sovereign credit rating as A1, with a stable economic outlook. The company believes that the focus of China's economic policy has shifted to improving the quality of growth, and that China has curbed the rise in overall economic leverage and maintained financial stability. China's huge foreign exchange reserves and the government's strategic management of the economy have helped to develop measures aimed at curbing financial risks. While the World Bank's "Global Economic Prospects" in June 2019 lowered its global economic growth forecast for 2019 and 2020, it maintained its forecast for China's economic growth this year, arguing that China has the ability to cope with external challenges and "headwinds".

2. All-round opening up creates more opportunities for all countries to share the benefits of China's development

China pursues a mutually beneficial strategy of opening up and strives to open up wider. A safe and stable political environment, large consumer groups with escalating needs, hard-working and well-qualified workers, sound and complete infrastructure, and an international and convenient business environment of fair competition under the rule of law, all provide countries with a broader market, more capital, richer products, and more opportunities for cooperation. China has always been an important promoter of global openness and a dynamic market for all countries to expand business opportunities.

China has the most promising consumer market in the world. It is not only "the world's factory", but also a global market. With a population of nearly 1.4 billion and a middle-income group of 400 million, China has the largest market in the world. The sustained and healthy development of China's economy has created extensive demand in many fields and provided an important engine for economic development. China has huge space and potential for consumption, which is clearly moving up market and making a growing contribution to the economy. The consumption growth rate has surpassed that of fixed asset investment, and its gradient effect is prominent (see Box 7). According to an MGI report, China is the world's largest market in many categories, including automobiles, alcohol and mobile phones, accounting for about 30 percent of global consumption. Its huge consumer demand provides an enormous market for countries all over the world. In the coming 15 years, China's imports of goods and services are expected to exceed US$30 trillion and US$10 trillion.