There is no rocket science, magic or dubiety involved in China’s development miracle which posted a GDP growth rate of 6.9 percent in 2017, higher than the set target. It is the outcome of an economic management system that was put in place by a visionary political leadership to let everyone enjoy the fruits of sustainable progress.

Recent data released by China’s National Bureau of Statistics (NBS) put the growth rate at 6.9 percent against the forecasted 6.5 percent which has set the stage for resilient growth. It has impressed the world at a time when speculation was doing the rounds that the Chinese economy was losing steam. Naysayers have also eaten humble pie as clear facts cannot be dismissed.

Statistics show that China’s economic management system has proven itself highly sustainable and mature, offsetting market turmoil and financial nuisances. Aspiring to be a beneficiary of roaring economic growth, overtly or covertly, every country wants to board the express train of China’s progress.

The country’s economy gained momentum as the real economy performed well throughout 2017. China's seamless growth in industrial production is one of the driving forces behind the continuous and epic development in every sector.

According to the World Bank forecast, from January to November 2017, China's total import and export of goods accounted for 8.8 percent of the world's total imports and exports, higher than the same period in 2016. “The improvement of China's foreign trade not only has a positive impact on world trade but also contributes to the steady recovery of the world economy,” the World Bank stated.

One of the major economic strategies helping GDP growth is the concentration on international cooperation that has led to rapid development of regional economies. Throughout 2017, the total import and export volume between China and Southeast Asian countries reached nearly 3.5 trillion yuan ($550 billion), an increase of 16.6 percent from 2016.

The Belt and Road Initiative kicked off by China has been anchoring regional economic activity, fueling ever increasing GDP growth. Since 2017, investment cooperation with countries along the Belt and Road has been steadily advancing. According to the data from the Ministry of Commerce, Chinese enterprises have conducted non-financial direct investments of $14.36 billion in 59 countries along the Belt and Road, accounting for 12 percent of the total amount in 2017.

The structural reforms on the supply side have also played a significant role in accelerating the GDP rate in 2017. Due to reforms, industrial capacity rose 3.7 percentage points from 2016; the iron, steel and coal industries hit their annual goals; high-tech manufacturing growth took everybody by storm, increasing its revenue by 13.4 percent in 2017.

Under the leadership of Chinese President Xi Jinping, reforms have bolstered economic efficiency by promising profit incentives to rural collective enterprises (which are owned by local governments but are guided by market principles), family farms, small private businesses and foreign investors and traders. To ramp up agricultural output, steps continue be taken toward expanding property rights in the countryside. Opening up private agricultural industries has led to more productive farms and more efficient use of labor. Together these factors have led to a robust growth of village enterprises, with many workers moving away from traditional agricultural work into high-value-added manufacturing.

Another factor that contributed to keeping economic growth stable was a hike in foreign exchange reserves in December 2017. The sheer momentum of foreign exchange reserves belied critics’ statistics and estimations. Reserves ballooned to $3.14 trillion as credit went through tight regulations and a strong yuan discouraged capital outflow.

Integration of the real economy with artificial intelligence (AI) is believed to be the widely known secret electrifying China’s growth. The State Council of China is aggressively working on developing a domestic AI industry worth $150 billion similar to Silicon Valley in the United States.

With progress in AI, China will be experiencing the fourth industrial revolution in global productivity that has been projected to grow by 14 percent in the next 13 years. China spent 1.57 trillion yuan ($250 billion) in 2016 on technology research and development, an increase of 10.6 percent.

Undoubtedly, China has found a unique niche in the world's economy by gradually shifting from a manufacturing to a service-oriented economic system. Keeping stagnation at bay and welcoming market-based paradigms to increase profit and incentives are the open secrets that have put China on a high pedestal of progress.

The author is a senior journalist and fellow at the International Center for Journalists

The article was originally published in China Today

Copyedited by Rebeca Toledo

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