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Event Review | Resetting China’s Growth Model
3 July @ 10:00 am - 11:00 am
Today’s Webinar focused on analysing China’s shift towards a social policy driven growth model and how opportunities for foreign business and investment in China remain abundant despite its shift of emphasis from export reliance towards domestic consumption.
A panel including: John Russell (Managing Director, North Head); Chim Lee (Science, Technology and innovation Policy Analyst at China Policy); and Xu Liang Di (Social Policy Analyst at China Policy) discussed new drivers for economic growth in China and any potential uncertainties for Australian businesses in the next few years.
General Economic Outlook
Firstly, the panel agreed that the absence of an explicit GDP target in the Government’s policy objectives this year (the first time since 2002) was a significant indicator of China’s economic trajectory for the next few years. Xu Liang Di stated that while an inferred GDP target could be around 3-4 per cent, the choice to focus on social oriented goals such as poverty alleviation, securing livelihoods and stabilising employment demonstrates that China is looking to invigorate domestic consumption to address income, education and healthcare inequality.
However, the panel was quick to reassure foreign companies that a movement away from export reliance does not mean less business and investment opportunities. Although China’s economy is obviously depleted somewhat due to Covid-19, IMF estimates suggest that China will continue positive growth of 1 per cent this year and rebound to 8.4 per cent in 2021 while the US and EU could experience large negative growth.
This means that, not only is China continuing to welcome foreign businesses and investors, the Chinese economy remains a reliable business environment for foreigners. With a fiscal stimulus package of AUD 1.8 trillion aimed at infrastructure provisions and industry innovation as well as a AUD 540 billion relief package, there is an opportunity for foreign businesses – particularly micro and small and medium enterprises (SME’s) – to diversify and capitalise on emerging industries.
Key Economic Opportunities
One industry that will be key moving forward will be e-commerce. John placed particular emphasis on e-commerce being a foundation for Government growth plans, looking to expand on a 68 per cent growth rate in 2019. With 105 import pilot cities already, Covid-19 may act as a positive catalyst in this area, increasing domestic demand and, in turn, provide a great opportunity for foreign enterprises to enjoy GST and company income tax exemptions among other benefits.
Another prospective industry was identified as investment in online healthcare and education services. While these industries were already emerging pre-Covid, the outbreak of the virus fast-tracked the industry out of necessity. This means that these industries have a lot of room for technological innovation as they are currently imperfect attempts to mirrors pre-existing education and healthcare services. Also, given the Government’s growth trajectory, this will definitely be a heavily supported industry in order to address its social goals.
Things to Consider
Chim Lee pointed out that the move to increase domestic consumption and reinforce frameworks for local research and innovation is not a movement away from global markets but the creation of a “double-circulatory system”, where the domestic and global are both separate and linked.
The panel concluded by attempting to ease concerns about the Australia-US-China trilateral relationship, saying that all three countries are heavily economically linked and that this is not likely to change. However, they also agreed that Australia needs to be wary that agreements between China and the US will likely lead to import diversion, meaning that there might be less demand for Australian imports.
小组成员包括:诺恒咨询(North Head)董事总经理约翰·罗素(John Russell) ，李辰(《中国政策》科技与创新政策分析师、与《中国政策》社会政策分析师徐亮迪讨论了中国经济增长的新驱动力以及未来几年澳大利亚企业面临的潜在不确定性。
首先，专家小组一致认为，政府今年的政策目标中没有明确的GDP目标（自2002年以来首次)，而GDP是中国未来几年经济发展轨迹的一个重要指标。徐亮迪表示，虽然GDP的预期目标可能在3% – 4%左右，但选择关注社会导向的目标，如减贫、保障生计和稳定就业，表明中国正寻求通过刺激国内消费来解决收入、教育和医疗不平等问题。