Asahi Shimbun:
If there were no COVID-19 impact, what would the potential growth rate of China's economy have been? How do you see the possibility of economic recovery in the second half of the year for achieving the full-year GDP growth target of 5.5%? Thank you.
Fu Linghui:
Thank you for your questions. Many institutions and scholars have made calculations regarding the potential growth rate of China's economy, and the calculation results are somewhat different. Generally speaking, most conclusions agree that the potential growth rate of China's economy at this stage is about 5%-6%. As China's economy grows larger and the constraints on labor, resources, and the environment become stronger, the potential growth rate will gradually decrease. However, from a global perspective, the potential growth rate of 5%-6% is still at a medium and high level. Especially under the conditions of such a large economy as China, it is very difficult to maintain medium- and high-level growth, which also shows that China's economic growth potential is still relatively large.
China is still the largest developing country in the world. Although China's per capita GDP has exceeded $10,000, there is still a big gap compared with the per capita level of more than $40,000 in developed countries. This gap means a huge space and potential for the future development of China's economy. It should be pointed out that due to the complex and severe international environment, compounded by the COVID-19 pandemic unseen in a century, the adverse currents encountered by globalization, and the critical period for China's economic restructuring, it is increasingly difficult for China's economic growth to reach its potential level. To maintain steady economic growth, we still have to work hard. In the first half of this year, China's economy overcame unexpected factors and maintained growth, which was an uphill battle. The risk of stagflation in the world economy is on the rise, external instability and uncertainties are increasing, and the triple pressures of shrinking domestic demand, supply shocks, and weakening expectations still exist. Achieving the expected economic growth target for the whole year is challenging. However, it should also be noted that the fundamentals that sustain China's long-term economic growth have not changed, the economy still shows strong resilience, the macro policy adjustment tools are abundant, and there are many favorable conditions for promoting sustained economic recovery. In the second half of this year, with the efficient coordination of COVID-19 response and socioeconomic development, and various economic recovery policies and measures yielding tangible results, China's economy is expected to continue to rebound and perform within a reasonable range. Next, we must seize the favorable opportunity for economic recovery, coordinate COVID-19 response and economic and social development following the overall requirements of preventing the epidemic, stabilizing the economy, and developing safely, and ensure policies and measures to stabilize the economy continue to yield results, so that we can consolidate the foundation for economic recovery, and maintain sustainable and healthy economic development. Thank you.
