2019 has not been too kind to Chinese economic development. A Trade War, along with the Hong Kong protests, has shaken China considerably. GDP growth fell to its lowest level since 1992.
However, the republic has not lost hope and is expected to provide its full-year growth figures. The government plans to achieve a 6% to 6.5% growth at the very least. Gao Shanwen, the chief economist from Essence Securities, has recently expressed his opinion on current affairs and said that China’s economy would continue to grow in the next decade but at a slower pace. As he stated, the economy would not surpass 5% on average, and it will be hard to sustain even 4%. The economic giant faces serious issues as an aftermath of the Trade War. The government is doing everything it can to improve the situation, from using fiscal stimuli to pouring billions of dollars in the economy. As a last resort, China decided to open its economy to foreign companies. This way, it hopes to attract more foreign investment, in place of lost U.S. traders.
The influence of foreign investment and trade in China has been increasing day-by-day ever since the Open-Door Policy was implemented in the early 1980s. However, existing geopolitical tensions are playing a huge negative role in the domestic labor market. It should be noted that unemployment had been a serious social issue in China for the last few years before the trade war had even started. One of the biggest challenges that China is facing, for now, is the issue of keeping this under control.
Usually, officials are reluctant to use words that may indicate serious problems. However, China’s State Council has, as of now, underlined the importance of employment. The Chinese State Council urged local governments to take measures to avoid massive job losses in 2020. The Chinese government is fully ready to take decisive measures to keep unemployment as low as possible.
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