China's economy has undergone a profound restructuring since 2011, and its double-digit growth speed has gradually slowed down to 7 percent or so. Such a shift in gears has stoked rumors that the country is headed toward a hard landing or even that the world's largest developing economy is about to collapse.
In fact, misunderstandings, doubts and even curses against China's economy have been unceasing ever since the founding of the People's Republic of China in 1949, especially in tough times. Despite that, it has managed to transform from an impoverished agricultural country into the second largest economy in the world. One can easily find that China's strength has yet to be fully unleashed, and that its natural advantages are a source of confidence in the future of China's economy.
First of all, China boasts high-quality labor resources. Most Chinese are hardworking, persevering, diligent and thrifty. These qualities translate into labor resource advantages and development momentum over the course of reform and opening up and industrialization. Chinese don't find working overtime intolerable, take delight in learning and working hard, persevere in finishing their daily work, and take initiative in joining international industrial specialization and cooperation. They tend to save their money for a rainy day, which has resulted in China's capital accumulation far outpacing that of other countries, and has helped propel the rise of the nation's economy.
Though China is entering an aging society with a dwindling labor force figure, the number of people receiving a higher education is on the rise. In 2003, the number of college students in China exceeded that of the United States. In 2015, college graduates reached 7.5 million, almost equaling the population of Israel.
It's predicted that roughly 29 percent of worldwide graduates aged between 25 and 34 will come from China in 2020, according to a 2012 study by the Organization for Economic Cooperation and Development. Furthermore, McKinsey & Co. predicts that by 2030, China will have about 200 million college graduates, exceeding the total labor force number of the United States and making up 30 percent of the world's highly educated population.
Given that, China will not lose its advantage in the labor market, and in fact, its high-caliber workforce is still expanding. As long as the ongoing restructuring follows the right direction, the chances are great for China to maintain mid- and high-speed growth.
Meanwhile, there is huge market potential in China. After three decades of rapid development, 1.3 billion Chinese have gradually risen out of poverty. When China realizes a moderately well-off society by 2020, its market space will expand further, and even a populous country like India won't be able to hold a candle to it. The current sluggish demand in some industries is a result of a mismatch of supply and demand and structural oversupply. Efforts should be made to cope with consumption upgrading and changes in demand.
In addition, China is a country that is curious about novelty. Take the mobile phone and Internet industries for instance. The substantial consumption of mobile phones and high tolerance of Internet risks led to the rapid development of Internet technologies and products. Considering that, China may take a lead in the fields of mobile Internet, the Internet of Things, e-commerce and new finance. To some extent, achieving success in China will be integral to succeeding in the global market.
Currently, developed countries with industrial capital, such as South Korea and Germany, are actively seeking cooperation with China. When their technologies and products are fully developed to meet China's tremendous demand, industrialization will make further progress, and a crop of great enterprises will be brought up.
Last, but not least, China pursues market-oriented reform in an energetic but prudent manner. Its transformation from a planning system to a market system can't be accomplished in one step. It's a gradual process of adapting and learning. Since it began reforming and opening up in 1978, progress has been made in economic transformation, recognition of reforms and opening up as well as in the application of international rules of business. At the same time, huge potential is still untapped, the imbalanced development of west, central and east regions, as well as rural and urban areas.
Indeed, China's reform now encounters a bumpy and rugged section, and every step forward comes at a price. However, there are also opportunities masked as difficulties. In some sense, the current slowdown will remove obstacles and facilitate substantial progress in the country's further reform and opening up.
This is an edited excerpt of an article written by Liu Guohong, a research fellow at Shenzhen-based China Development Institute, and published in China.org.cn
Copyedited by Jordyn Dahl
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