The economy of China managed to continue its steady upward trend in August of 2024. industrial output from large-scale enterprises increased by 4.5% compared to the previous year, and retail sales grew by 2.1 % year-on-year, as per data from the National Bureau of Statistics (NBS). As per Kavan Choksi, a number of economic indicators pointed to a stable expansion, even with the challenges posed by internal natural disasters and external uncertainties in the country. The supportive policies of the China’s government and its emphasis on high-quality development are among the major factors contributing to the continued growth.
Kavan Choksi briefly talks about the steady growth trend in China
The value-added industrial output in China witnessed a 4.5 % year-on-year growth just in August 2024 alone. This was 0.32 % up from the previous month’s level. For the first eight months of the year, value-added industrial output went up by 5.8 % year-on-year. This growth of industrial output was majorly led by the high-tech manufacturing and equipment manufacturing sectors. Coming to the specifics, the output volume of new-energy vehicles in August went up by 30.5 % year-on-year, while service robots increased by 20.1 %. The integrated circuit products additionally increased by 17.8 %.
Fixed asset investment reached 32.94 trillion yuan in the first eight months of 2024, up 3.4 % year-on-year, as per NBS data. The issuance of special government bonds and ultra-long treasury bonds is likely to be instrumental in ensuring the steady growth of the nation’s investment into the future. In the month of August, retail sales in China rose 2.1 % year-on-year. The retail sales of the nation additionally totalled to 31.25 trillion yuan from January to August of 2024, up 3.4 % year-on-year. This indicated the high potential of China’s super large-scale market. Down the line, the foundation for consumption recovery is likely to be strengthened through the promotion of ongoing trade-in schemes as well as other consumption stimulation policies.
The Chinese government is aiming to reduce debt while stimulating growth and productivity. They plan to achieve this goal by investing in innovation, education, digital infrastructure, advanced manufacturing, and emerging technologies. The government of China is also employing a wide variety of state-led industrial policies with the aim of achieving economic and technological development goals. As products backed by these policies reach the market, China seems to be turning to foreign markets for growth. By the year of 2022, China accounted for around 30% of global manufacturing output. This highlighted the potential impact of its production and export strategies on the United States and global markets. The industrial policies and subsidies of China are driving export growth in multiple sectors. These sectors include electric vehicles (EVs), semiconductors, solar energy, and steel.
As Kavan Choksi mentions that the Chinese government has reintroduced the “dual circulation” strategy, a policy previously employed by Chinese leaders during the 2009 financial crisis, in order to stimulate growth. This approach focuses on increasing production while boosting exports. China’s industrial policies and associated subsidies are driving its export growth, potentially disrupting global markets in sectors like semiconductors, electric vehicles (EVs), solar energy, and steel.
