Commentary: China’s large domestic market helps it withstand trade conflicts
By Mei Xinyu
Recently, China has been acting calmly in its counteraction against the US-led trade war, on just grounds, to its advantage, and with restraint.
The country’s calmness and confidence come from not only morality, systems and history, but also its broad domestic market.
China is a large country, and its broadness is what emboldens it. With vast land, abundant resources and a large population, China has always enjoyed favorable conditions in economy, business, politics and culture over the past more than two thousand years since the Qin and Han Dynasties.
In addition, China has its unique advantage in domestic market. It is an advantage beyond reach of most of the countries, especially in today’s world where global trade and cross-border investment are developing in unprecedented speed. China’s domestic market will not only help the country lessen external impacts, but also improve the country’s influence in the international economic and industrial system.
Moreover, Chinese market is favored by the international community. The First China International Import Expo (CIIE) will be held this November in Shanghai, as a major measure for the country to open its market to the world and a new platform for other countries to access the Chinese market.
So far, more than 2,800 enterprises from over 130 countries and regions have confirmed to participate in the event. It is estimated that the expo will attract over 150,000 purchasing agents from both home and abroad.
China enjoys a sound momentum of growth. The country’s foreign trade is seen as a miracle by the international community – the its export volume has stayed the world’s largest since 2009.
In fact, the fast expansion and upgrading of the country’s domestic consumption is also a noteworthy “miracle”. Final consumption contributed an average figure of 55 percent to the economic growth of China on an annual basis from 2013 to 2016, becoming a major engine driving the country’s economy. Besides, China ranks the second in the world in terms of its GDP and domestic market size.
Statistics showed that domestic final consumption has been making high contribution to China’s economic growth, and has been generally on an upward trend in recent years. Since 2012, the annual contribution of this sector to China’s GDP growth stood at respectively 54.9, 47.0, 48.8, 59.7, 66.5 and 58.8 percent, driving up economic growth by 4.3, 3.6, 3.6, 4.1, 4.5 and 4.1 percent.
The commodity and service trade deficits of the US saw a monthly increase of 7.3 percent in June, the first scale-up in the recent four months, according to the latest data from the US Department of Commerce. It is a proof that the trade war cannot reduce trade deficit.
The huge market size of China suggests large space for maneuver. Thanks to the market size, China enjoys high macroeconomic stability, which enables its government to have a wide space in implementing macro-control and maintaining stable economic growth. In the meantime, the Chinese manufacturers, facing changing external environment, can still get rid of the troubles in a quicker manner and stay competitive in the global market.
Given the development of each major economy and China’s contribution to related countries in recent years, it is believed that China is still able to consolidate its leading position in the global economic and industrial system with the help of its domestic market despite of the complicated trade conflicts,
(Mei Xinyu is a researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce)
People’s Daily Overseas Edition
