CHINA’S IMPACT TO THE WORLD ECONOMY

China has been playing an active and constructive role in the world economy in recent years. According

to a report by the State Council of the People’s Republic of China, China’s economic growth has

contributed over 25 percent to the global economy from 2011 to 2015 . IMF data shows that China’s
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contribution to world economic growth in 2018 was 21.74 percent, which is much higher than that of

the US (16.25 percent) and the eurozone (8.24 percent) . Since China began to open up and reform its
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economy in 1978, GDP growth has averaged over 9 percent a year, and more than 800 million

people have lifted themselves out of poverty . In addition, China is now an upper-middle-income
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country .
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China recently released its major economic indicators in 2021, with the GDP reaching 114.37 trillion

yuan ($18 trillion), which is a year-on-year increase of 8.1%, beating expectations. The growth rate was

much higher than the world average of 5.5% in 2021.

Among others, China's foreign trade of goods totaled 39.1 trillion yuan ($6.05 trillion) in 2021, increasing

21.4% yearly. Moreover, its imports and exports exceeded the $6 trillion threshold for the first time.

Meanwhile, foreign direct investment broke all previous records, with the actual amount of foreign

investment used in China being 1,149.36 billion yuan in 2021, a year-on-year increase of 14.9%.

One of the crucial factors to ensure China's resilient economic performance is its continuous endeavors

to pursue reform and opening up to achieve high-quality economic development. Despite the

tremendous pressure brought about by the changes in the economic environment at home and abroad,

the fundamentals of China's strong economic toughness, sufficient potential, and long-term

improvement have not changed.

The China International Import Expo (CIIE) has been held every year since 2018. After three years, the

exhibition has developed into an essential platform for international procurement, investment
promotion, cultural exchanges, and inclusive cooperation, serving as "an international public good for

the world to share." In addition, the expo facilitates factor resource sharing and internal and external

market connectivity and helps boost the world economy.

In recent years, China has made great efforts to promote multilateral cooperation. In addition to the CIIE

in Shanghai, the China International Fair for Trade in Service (CIFTIS) in Beijing is another important

event showing the country's determination to open up for multilateral cooperation. Moreover, China

has been working on rule-based institutional reform and opening up, which can be witnessed with the

accelerated construction of the Hainan Free Trade Port and the continuous promotion of the Pilot Free

Trade Zone.

Likewise, several mechanisms have also been well established to ensure that China can work with more

countries globally conveniently and smoothly, including the China and the Central and Eastern European

(CEE) countries cooperation mechanism, the China-ASEAN dialogue relationship, as well as the Forum on

China-Africa Cooperation (FOCAC) and the China-CELAC (Community of Latin American and Caribbean

States) Forum.

As the world's second-largest economy, China's effort to ensure its door opens ever-wider to the world

and determination to promote international cooperation under the frameworks of various multilateral

agreements will encourage more countries to tap into its market potential and achieve joint

development.

The World Bank's latest Global Economic Prospects report predicts that global economic growth is

expected to significantly decelerate to 4.1% in 2022 from the 2021 level of 5.5%. The rate is expected to

be 3.2% for the year 2023. The rapid spread of the Omicron variant indicates that the pandemic will
likely continue to disrupt world economic activity in the days to come. Moreover, a notable deceleration

in major economies will weigh on external demand in emerging and developing economies.

China's development will face pressure and challenges ahead, given the external uncertainties.

However, the country's economy is expected to maintain a stable growth momentum as it continues to

accelerate the development of the digital economy. In addition, China will continue to improve its

business environment and deepen institutional reform, which will steer economic globalization towards

open, inclusive, balanced, and win-win results and contribute to the global economy.

China has spent the past 70 years determining the best path for its development while also consistently

making contributions to world advancement. Since the start of China's reform and opening-up in 1978,

the economy of the nation has grown quickly and steadily.

The nation has formed a set of development models with Chinese characteristics through the

advantages of a low-cost labor force, high capital accumulation and investment rates, continuous

education investment and human capital accumulation, thereby joining the global industrial chain and

reaping dividends now. It has also made unprecedented contributions to economic development,

poverty eradication, environmental governance, scientific and technological innovation and

international multilateral cooperation.

According to data from the UN, China's GDP in 2018 totaled $13.61 trillion, accounting for 15.86 percent

of the global GDP. At constant prices, China's GDP grew by 6.6 percent year-on-year in 2018, twice the

average global GDP growth which was recorded at 3.03 percent year-on-year. IMF data shows that

China's contribution to world economic growth in 2018 was 21.74 percent, which is much higher than

that of the US (16.25 percent) and the eurozone (8.24 percent).

In 1980, China's contribution to world economic growth was only 5.22 percent. This figure has tripled in

the past 40 years. World Bank data shows that China's annual contribution rate to world economic

growth was 1.39 percent between 1961 and 1978, and 16.28 percent between 1978 and 2017. Although

it was slightly lower than the US' contribution rate from1978-2017 (17.14 percent), it was significantly

higher than it was before the reform and opening-up.

Over the past 20 years, China's contribution rate to world economic growth has been catching up to that

of Japan, Asia's most developed country, and the US, the world's most developed economy. According

to World Bank data, China's share of world GDP (9.22 percent) began to exceed that of Japan (8.63

percent) in 2010, and the gap between China and US has been narrowing since 2003.China's

contribution rate to world economic growth has surpassed Japan's since 1992 and the US since 2006. By

the PPP method, China's contribution rate to world economic growth has surpassed Japan's since 1992

and the US since 2005.

China's infrastructure network is becoming more and more comprehensive, and China provides

diversified investment and financing-system assistance for infrastructure construction in many

countries.

The 70th anniversary of the founding of the People's Republic of China also celebrates the country's

rapid development in infrastructure construction. At the end of 2018, China's highway mileage was 4.85

million km, of which 143,000 km were highways, ranking first in the world. China's high-speed railway

totals 30,000 km, also ranking first in the world. Its railway business mileage is 132,000 km, ranking

second in the world. Under the Belt and Road Initiative (BRI), China has signed increasing numbers of

win-win cooperation projects. By the end of August 2019, 136 countries and 30 international

organizations have signed 195 cooperation documents with China. From 2013-18, China accumulated

roughly$90 billion in direct investment for countries along the BRI. China's financial institutions have
now constructed a long-term, stable and sustainable diversified financing system for national

construction projects, providing financial guarantees for infrastructure construction in many countries.

Furthermore, China has made great contributions to poverty alleviation globally. It was the first country

to achieve the standard of poverty reduction laid out in the UN's Millennium Development Goals. In

1978, China's poverty-stricken rural population was 770 million, compared with 16.6 million in 2018. The

incidence of poverty also dropped sharply from 97.5 percent in 1978 to 1.7 percent in 2018. Poverty

reduction in China has accelerated the process of global poverty reduction. China's organized, planned

and large-scale poverty alleviation development, especially the implementation of its prevision poverty-

alleviation strategy, provides a model for global poverty reduction.

Since 2015, China has fought to win the battle against poverty, and subsequently introduced top-level,

four-pillar and eight-pillars trategies to alleviate poverty. It has established a complete policy system, a

comprehensive mobilization system, a supervision and inspection system, and an assessment system for

poverty alleviation.

The main driver of global economic growth is now China. China's GDP in 2018 was $13.61 trillion, or

15.86 percent of the world GDP, according to data from the UN. China's GDP increased by 6.6 percent

year over year in 2018, which was twice the average global GDP growth of 3.03 percent year over year.

This growth was measured at constant prices. According to IMF data, China contributed 21.74 percent

to global economic growth in 2018, which is significantly more than the US (16.25 percent) and the

eurozone (8.24 percent).

China has had a significant impact on the world economy in recent years. As the world's second-largest

economy, China's growth has contributed to global economic growth. China is also a major trading

partner for many countries, and its manufacturing sector has played a significant role in the global

supply chain. Additionally, China's Belt and Road Initiative has the potential to further increase its
economic influence around the world. However, there are also concerns about issues such as

intellectual property theft and trade imbalances. Overall, China's impact on the world economy is

complex and multifaceted.

REFERENCES:

Times, G. (n.d.). 70 years: China’s contributions to the world. Copyright 2014 by the Global

Times. https://www.globaltimes.cn/content/1165930.shtml

弓迎春. (n.d.). China’s recovery contributes to global economy - China.org.cn.

http://www.china.org.cn/opinion/2022-01/24/content_78007868.htm

China’s contribution to the global economy. (2017, January 16).

https://english.www.gov.cn/news/top_news/2017/01/16/content_281475542971540.htm

Overview. (n.d.). World Bank. https://www.worldbank.org/en/country/china/overview