China pins hope on new development pattern to crank up economy

BEIJING -- At a time when the global economic recovery was complicated by the unabated COVID-19 pandemic and anti-globalization sentiment, China brought to the table a new development pattern.

During a symposium with entrepreneurs last week, Chinese President Xi Jinping stressed the need to give full play to the advantage of a huge domestic market, so that a new development pattern will gradually be created whereby domestic and foreign markets can boost each other, with the domestic market as the mainstay.

Analysts say the new development pattern charts the course for China's high-quality economic development, which requires stronger endogenous driving forces amid mounting external uncertainties.

Domestic market as mainstay

Boasting the world's largest industrial system, China has over 123 million market entities and over 170 million skilled professionals, as well as a population of 1.4 billion that includes 400 million middle-income earners, which makes it a necessity for the world's second largest economy to make the domestic market a mainstay of the new development pattern.

China has worked to tap the potential of the domestic market from both the demand side and the supply side.

On the demand side, the country pledged to unleash the potential of consumption by stimulating consumer spending and increasing public spending, as well as expanding investment in infrastructure and emerging strategic industries.

The commitment was evidenced in the annual government work report released in late May, which gave priority to stabilizing employment and ensuring living standards against the COVID-19 epidemic's economic fallout, urging efforts to boost consumption and expand investment in a mutually reinforcing way.

As the epidemic slowed business activities and dented the job market, China slashed fees for firms to help ensure they keep employees on the payroll, having refunded 63.6 billion yuan (about $9 billion) to over 4.3 million firms in the first half of this year and benefited around 100 million people.

Official data showed that China's surveyed unemployment rate in urban areas stood at 5.7 percent in June, 0.2 percentage points lower than that of May, while a total of 5.64 million new urban jobs were created in the first half of the year, completing 62.7 percent of the annual target.

In a bid to stimulate new consumption demand and promote industrial upgrading, China has vowed to step up investment, especially in new infrastructures like 5G, AI and cloud computing. New infrastructure investment is estimated to reach 17.5 trillion yuan for 2020-2025, representing an annualized growth rate of around 21.6 percent.

A brand new information consumption market to be created by the new infrastructures will help spawn new drivers of domestic demand that can in turn stimulate the growth of infrastructure, said Zhu Keli, a researcher on the new economy with the Development Research Center of the State Council.

On the supply side, China has taken multi-pronged measures to protect the supply chain from succumbing to epidemic shocks. Building on earlier efforts to advance the resumption of production, the country has ramped up tax and fee reductions and provided firms with low-cost loans to help them tide over difficulties.

The country will be unswerving in deepening supply-side structural reforms, which will help improve the quality of the domestic economy, analysts say.