China takes economic approach to a new level: UAE ambassador

The UAE Ambassador to China, Dr Ali Obaid Al Dhaheri, has said that the COVID-19 pandemic has moved China’s economic approach into a new phase, bringing more focus to domestic consumption as opposed to foreign exports.

“China is transforming its domestic consumption. This was clear even before this year, as the proportion of exports in China’s GDP has dropped from about 35 percent in 2006 to about 17 percent last year,” the Ambassador wrote for a China Daily.

Dr. Al Dhaheri added that China’s shift from an export-oriented economy to a domestic consumption and investment-driven one is a natural progression of the expanding Chinese economy. “This has grown larger with rising household incomes, and the services sector accounts for a greater portion of its GDP.”

He wrote, “In the past, what was known at this time as the Moon Festival was celebrated at harvest time, with ancient Chinese emperors worshipping the moon in autumn to thank it for the harvest.

This is quite a fitting comparison for the year China has faced. There has been a great focus upon the challenging year the country has had, among the most difficult peacetime periods in the modern era.

There has been much focus and hard work. From my standpoint, China has reaped the benefits from excellent management of this year’s challenges.

We are now at the flipside of the situation earlier in the year, around spring. At this time China was beset by the onset of COVID-19.

Now there is a wholly different story, and the China at the start of the year is unrecognisable to the China at its close.

The country is probably the first notable country to emerge from this challenge with a “new normal”. This of course is not the glowing rate of 8 percent growth we have come to expect from China over the last 20 years. However, this is a solid showing when global economies are in freefall and finding dealing with COVID-19 too challenging.

The Chinese economy is also moving to a new phase. China is transforming its domestic consumption. This was clear even before this year, as the proportion of exports in China’s GDP has dropped from about 35 percent in 2006 to about 17 percent last year.

China’s shift from an export-oriented economy to a domestic consumption and investment-driven one is a natural progression of the expanding Chinese economy. This has grown larger with rising household incomes, and the services sector accounts for a greater portion of its GDP.

There is a different mood in China now, and a sense of optimism in the air.

This has been buoyed by measures of manufacturing activity rising in the month of September. The official China Manufacturing Purchasing Managers Index rose to 51.5 in September, up from 51 in August. This is ahead of expectations, which were at about 51.2 percent from a respected poll of economists by Reuters.

WAM