Page 9 - THE SOUTH CHINA BUSINESS JOURNAL
P. 9
June 2017
Graphic©Asia Briefing Ltd. timent in Europe. China’s com- found that about 80 percent of surveyed
mitment to globalization was re- companies feel that foreign companies are
To help stimulate GDP growth, China has peatedly affirmed, including the less welcome in China than in the past.
accumulated massive debt levels – par- declaration that “economic glo-
ticularly over the past two years. Li stated balization is in the fundamental The consistency of China’s message on
that the fiscal deficit for 2017 would re- interests of all countries.” high-profile platforms – both at home and
main at three percent of GDP, meaning abroad – reveals a strategy to cultivate an
an additional RMB 200 billion (US$29 The comments echo President Xi image of a responsible protector of trade
billion) worth of debt. Though the same Jinping’s defense of globalization and internationalism. The message ap-
three percent target was set for 2016, the at the World Economic Forum in pears at odds with the experiences of for-
fiscal deficit ended up reaching 3.8 percent Davos in January. Beyond politi- eign enterprises operating in the country,
by the year’s end. In 2015, the deficit was cal rhetoric, however, they point however, as they report experiencing the
pegged at 2.3 percent. to the genuine uncertainty facing China’s very trends of economic nationalism that
economy as a result of potential trade the government publicly decries.
China’s leadership understands the neces- barriers and heightened tariffs. Trump,
sity of deepening reform efforts to ensure for example, has threatened to slap taxes Key Takeaways
stable growth, but additional stimulus of up to 45 percent on imported goods
spending may be on the cards for it to meet from China. Amid global uncertainty, domestic eco-
its medium-term growth goals. This may nomic restructuring, and high profile lead-
especially be the case if they expect growth Li further stated that “World economic ership movement set to take place at the
to continue to decline and fall short of the growth remains sluggish, and both the de- fall’s party congress, China’s economic tar-
6.4-6.5 percent average needed to attain globalization trend and protectionism are gets in the 2017 Work Report emphasize
the ‘Two Doubles’. growing,” and added, “there are major un- cautious stability. The government has set
certainties about the direction of the ma- moderate expectations for the economy’s
International Trade and Protectionism jor economies’ policies and their spillover performance, and seems intent on mini-
effects, and the factors that could cause mizing structural risks.
Li’s Work Report vigorously re-empha- instability and uncertainty are visibly in-
sized China’s commitment to globaliza- creasing”. Although the Work Report stresses a
tion and international trade, a reference to continuation of the status quo, it also
the protectionist rhetoric of US President The Work Report also referenced “pro- raises acknowledgement of the difficulties
Donald Trump, and rising anti-trade sen- found changes in the international eco- that China faces in maintaining resilient
nomic and political landscape” and “pro- growth in the coming years. By declaring
tectionism in its different forms”. While that the government will just try to achieve
the risks certainly exist, ongoing emphasis higher growth rather than promising it,
on foreign protectionism may in the future and warning of the domestic and inter-
be used to cover for disappointing domes- national challenges that might impede
tic performance. growth, the Work Report may be subtly
resetting expectations for China’s short- to
Despite China’s outward commitment to medium-term economic performance.
globalization, protectionism in China may
also be on the rise. Germany’s ambassa- This article was first published by
dor to China recently said as much, while China Briefing.
AmCham’s 2017 Business Climate Survey
7
Graphic©Asia Briefing Ltd. timent in Europe. China’s com- found that about 80 percent of surveyed
mitment to globalization was re- companies feel that foreign companies are
To help stimulate GDP growth, China has peatedly affirmed, including the less welcome in China than in the past.
accumulated massive debt levels – par- declaration that “economic glo-
ticularly over the past two years. Li stated balization is in the fundamental The consistency of China’s message on
that the fiscal deficit for 2017 would re- interests of all countries.” high-profile platforms – both at home and
main at three percent of GDP, meaning abroad – reveals a strategy to cultivate an
an additional RMB 200 billion (US$29 The comments echo President Xi image of a responsible protector of trade
billion) worth of debt. Though the same Jinping’s defense of globalization and internationalism. The message ap-
three percent target was set for 2016, the at the World Economic Forum in pears at odds with the experiences of for-
fiscal deficit ended up reaching 3.8 percent Davos in January. Beyond politi- eign enterprises operating in the country,
by the year’s end. In 2015, the deficit was cal rhetoric, however, they point however, as they report experiencing the
pegged at 2.3 percent. to the genuine uncertainty facing China’s very trends of economic nationalism that
economy as a result of potential trade the government publicly decries.
China’s leadership understands the neces- barriers and heightened tariffs. Trump,
sity of deepening reform efforts to ensure for example, has threatened to slap taxes Key Takeaways
stable growth, but additional stimulus of up to 45 percent on imported goods
spending may be on the cards for it to meet from China. Amid global uncertainty, domestic eco-
its medium-term growth goals. This may nomic restructuring, and high profile lead-
especially be the case if they expect growth Li further stated that “World economic ership movement set to take place at the
to continue to decline and fall short of the growth remains sluggish, and both the de- fall’s party congress, China’s economic tar-
6.4-6.5 percent average needed to attain globalization trend and protectionism are gets in the 2017 Work Report emphasize
the ‘Two Doubles’. growing,” and added, “there are major un- cautious stability. The government has set
certainties about the direction of the ma- moderate expectations for the economy’s
International Trade and Protectionism jor economies’ policies and their spillover performance, and seems intent on mini-
effects, and the factors that could cause mizing structural risks.
Li’s Work Report vigorously re-empha- instability and uncertainty are visibly in-
sized China’s commitment to globaliza- creasing”. Although the Work Report stresses a
tion and international trade, a reference to continuation of the status quo, it also
the protectionist rhetoric of US President The Work Report also referenced “pro- raises acknowledgement of the difficulties
Donald Trump, and rising anti-trade sen- found changes in the international eco- that China faces in maintaining resilient
nomic and political landscape” and “pro- growth in the coming years. By declaring
tectionism in its different forms”. While that the government will just try to achieve
the risks certainly exist, ongoing emphasis higher growth rather than promising it,
on foreign protectionism may in the future and warning of the domestic and inter-
be used to cover for disappointing domes- national challenges that might impede
tic performance. growth, the Work Report may be subtly
resetting expectations for China’s short- to
Despite China’s outward commitment to medium-term economic performance.
globalization, protectionism in China may
also be on the rise. Germany’s ambassa- This article was first published by
dor to China recently said as much, while China Briefing.
AmCham’s 2017 Business Climate Survey
7
