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The photo taken on May 16, 2018 shows an automatic container dock in Qingdao, Shandong Province, east China. China's foreign trade has grown 9.7% year-on-year, reaching a record high of 30.5 trillion yuan (about 4.5 billion US dollars) in 2018, the General Administration announced on Monday. Customs (GAC). The value was 2.7 trillion yuan higher than 2017, according to the GAC. (Xinhua folder photo / Wang Peike)
BEIJING, Feb. 3 (Xinhua) – While China posted slower growth last year, many fear that downward pressure on the world's second-largest economy is holding back global growth. However, a closer look at the economy would show that fears of a slowdown in the slowdown are overestimated.
A more sustainable growth model, coupled with a growth stimulus package, will underpin the economy in 2019, providing many opportunities for global investors who will remain ready to take advantage of the ever-changing market.
Here are four reasons to remain optimistic about the Chinese economy.
MORE SUSTAINABLE GROWTH
While China's GDP growth rate of 6.6 percent last year was lower than 2017 and double-digit growth was often observed in recent decades, investors should not forget that this growth was based on a much larger economic scale, badysts said.
The Chinese economy expanded by more than 90 trillion yuan (about 13.4 billion US dollars) in 2018, nearly three times its size compared to 10 years ago, according to official data.
"It is true that the economy is slowing down, but if you look at the production added each year, it's still very impressive," said Zhu Haibin, chief economist for China, China.
According to his calculations, even if China's growth slows by 6%, it would mean that the economy would grow by $ 700 billion a year, almost the size of some emerging economies.
These economic results have left the country with enough leeway to move from the old growth model of investment and export-led growth to a model that draws its strength from consumption and innovation, which is more sustainable and sustainable. less dependent on external factors.
While recognizing the economic hurdles, especially in the first half of 2019, Nomura Securities said in a report that the economy was likely to experience a rebound in the second half.
ROBUST CONSUMPTION
Although previous indicators have shown signs of lower domestic consumption, rational observers remain rather optimistic about the sector's greater potential in driving the Chinese economy and beyond.
The concern raised by Chinese consumers is largely exaggerated, said a report by the British think tank Oxford Economics. "We remain quite positive about China's consumption prospects."
Retail sales in China will remain strong in 2019 thanks to strong consumer services and growth support measures, despite the slowdown in the automotive sector, the report said.
According to the McKinsey Global Institute, the Chinese consumer continues to make more declines than usual. Among fresh foods, alcoholic beverages, cosmetics, etc., 10 times more consumers report exchanging products at higher prices than lows.
These trends are leading to increased imports of high-quality products from several markets of the Organization for Economic Co-operation and Development, he said.
New York-based research firm eMarketer predicted that China would become the world's largest retail market this year, with total retail sales reaching $ 5.63 billion.
MORE ROOM D & # 39; INVESTMENT
Thanks to the ongoing government deleveraging campaign, the buildup of debt since the 2008 financial crisis worries much less the Chinese economy.
In 2018, China has made steady progress in what it calls "structural deleveraging", using appropriate measures to reduce debt in different sectors.
The corporate sector, often considered the most troubled in terms of indebtedness, has seen a decrease in the leverage ratio thanks to the equity swap program, which allows companies to swap their debt for shares.
Since most of China's debt is denominated in local currency and the debts of strategic sectors are often guaranteed by the central government, it is unlikely that a financial crisis will occur, said Credit Suisse in its report. on the investment outlook for 2019.
With stable debt levels, the country has more leeway for effective investments to support growth. The country is committed to redoubling its efforts to repair the weak points of infrastructure and increase investment to support resettlement programs.
"If we continue to implement policies this year, we can expect stronger investment data," said Ning Jizhe, head of the National Bureau of Statistics.
MORE OPENING
According to the United Nations Conference on Trade and Development (UNCTAD), China has resisted the global downward trend of foreign direct investment (FDI) in 2018, the world's leading source of investment.
UNCTAD's director for investment and enterprise, James Zhan, has attributed more investment to China to factors such as further liberalization, particularly in the services and finance sectors, and Intensification of investment promotion efforts in high technology industries.
"Last year was another record, and prospects for FDI increase in China remain optimistic," Zhan said.
Foreign companies should take greater advantage of China's continued efforts to expand market access and create a better business climate this year.
One of the highlights will be a unified foreign investment law that aims to adopt a pre-established national treatment model with a negative list and enhanced protection of the property rights of companies investing abroad.
The law will be submitted to the next plenary session of the National People's Congress, scheduled to open on March 5th.
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