For years, China’s economy soared with double-digit growth. Even during the last financial crisis, the Middle Kingdom showed certain robustness; and over the past two years, the Chinese economy showed very little drop. Western so-called experts predicted a crisis for China because of sinking gross domestic product (GDP) figures, but on what high level?
However, it didn’t bother the new government in China to hear the experts talk. In 2013, President Xi Jinping said in a speech: “China’s economic fundamentals are sound. China has realized that it has to advance structural reforms in order to solve the problems hindering its long-term economic development, even though it will mean slower growth.” And that’s what happened.
Step-by-step, China is coming closer to meeting international standards. It seems to be even more important because Xi’s words indicate a determination to have more stable and sustainable growth. On top of that, they reflect the distortion of the country’s policy during the last decade and the transformation towards a more realistic economy. The Chinese leaders planned to support the domestic industry to a larger extent. And that support also materialized.
Other government’s records showed the growth of the Chinese economy in the 1st quarter of 2015 was “only” 7 percent; indeed proof of a solid economy. In this figure, the growth of energy intensive and polluting products decreased, while services increased and are today the driving force of the Chinese economy. Services already are generating 51.6 percent of the GDP; this is an increase of 1.8 percent compared to last year. Also the domestic market is growing, just as the government predicted some time ago. The domestic retail trade grew in the last year by 10.8 percent. And don’t forget internet sales, which increased by more than 40 percent.
To underline this growth, China is quietly founding a new Asian Infrastructure Investment Bank (AIIB). In terms of external affairs and economical advantages, this is a very clever move. Already 57 countries are taking part, and Switzerland and Great Britain are among some of the founding member European countries. The AIIB can be called a counterbalance to the International Monetary Fund (IMF). China was never really off track, probably just a bit shaken. To be continued.