What is China's economy going to be like in 2009? This is a question that will arouse the interest or concern of people from a wide spectrum of society, ranging from government officials and businessmen to factory workers and farmers. Conceivably, this is because China's economic performance will not only determine the country's overall pace of development in the short term, but also have a bearing on the livelihoods and welfare of billions of Chinese people for the time being.
An economic slowdown is looming large in 2009. For one thing, as the world economy staggers into recession, China's exports, which have fueled the Chinese economy for years, will fall significantly. This will undoubtedly deal a heavy blow to the numerous export-oriented firms, small businesses in particular, and bring down the growth rate. Overseas investment will also drop, since Western economies will reserve their money for economic salvation at home. Statistics indicate that foreign direct investment fell 37 percent last November, and this downward trend will likely continue in 2009.
Internally, many industries, including pillars such as real estate and automobile manufacturing, face the mounting challenge of overcapacity, which has led to falling prices, withering demand and market saturation. Adding to the misfortune is the critical issue of rising unemployment. With many businesses facing difficulties or closing down, millions of Chinese workers may soon be out of work, and the job market will become tighter than ever before. A think thank study estimates there will be 6.1 million college graduates looking for employment this year, creating a huge drag on fast economic growth and the increase in consumption.
In view of this gloomy outlook, some leading institutions and scholars have made moderate or even pessimistic predictions for the domestic economy this year. But others have struck a more cheerful and upbeat note. They expect China to achieve the 8-percent target growth rate proposed at the recent Central Economic Work Conference, where officials laid out key strategies to retain economic prosperity in 2009, including an active fiscal policy, an accommodative monetary policy, and giving priority to consumption as the principal force for maintaining fast economic growth.
In the wake of the timely and appropriate policies and strategies set at the Central Economic Work Conference, it seems that optimism remains in 2009 amid the chills brought about by the global financial crisis.