In a recent State Council meeting, the Chinese government reaffirmed its commitment to enhancing its business environment. This pledge reassuringly kickstarts the new year characterized by various supportive policies drafted to stabilize market confidence.
Experts from China anticipate that these initiatives, in combination with a host of other support measures, will shield the nation from economic pressure and drive consistent growth in 2024. Many economists predict a 5% growth rate for China in 2024.
In the executive meeting headed by Premier Li Qiang, emphasis was placed on fostering a business environment championing market-orientation, rule of law, and international norms. It is believed that this strategic route will help alleviate economic pressures and elevate the confidence of businesses.
Despite facing challenges such as the drag of global economic deceleration, geopolitical disturbances, and a high comparison basis, China remains resilient. A decrease in foreign investment inflow marked the year 2023 for the first time in many years, compounded by weakened domestic demand and adjustments in the property market.
Nevertheless, the Chinese government, prepared and ready, has launched several measures aimed at ensuring continued enhancement of the confidence of market entities, specifically targeting private sector enterprises and foreign companies established in China.
Chinese Vice Premier He Lifeng recently accentuated the importance of fostering the high-quality development of listed companies as a strategy to boost market confidence, stabilize capital markets, and promote high-quality economic development. The guidance explicitly emphasizes the importance to resolve specific challenges and bolster support for top-tier listed firms.
Looking ahead to 2024, stability can be discerned through the growth targets set by provinces. A total of 31 locales in China, including economic powerhouses like Shanghai, Beijing, and South China’s Guangdong Province, have aimed for a growth target around 5 percent or higher.
Chinese industry experts suggest that despite substantial progress made in previous years, there is still considerable potential for improvement in the business environment. Strenuous efforts in this regard could uphold confidence and stabilize market expectations.
Cao Heping, an economist at Peking University, remarked on the importance of the continuous commitment to bolster the business environment amidst the challenges of handling chain debt cases as the economy faces mounting downward pressure.
Cong Yi, a professor at the Tianjin School of Administration, joined the conversation by emphasizing expectations of the government at all levels to better serve the needs of market entities, be more attuned to their requirements, and unveil targeted support measures that factor in the differences in industries.
China’s efforts to better its business environment have received a warm reception from IMF officials. A Chinese official at IMF called for a more careful study of China’s growth trend in the IMF’s annual review of the world’s second-largest economy.
IMF, in a recent statement following its 2023 Article IV Consultation, applauded the Chinese authorities’ efforts on focusing more on sustainable drivers of quality growth and their commitment to maintaining a level playing field to attract investments.
Acting as an embodiment of investor confidence in China, a survey reveals that nearly 70% of the 600 foreign-invested companies are optimistic about China’s market over the next five years. These companies expressed growing satisfaction with China’s business environment.
Chinese Foreign Ministry spokesperson, Wang Wenbin, assured businesses worldwide that China welcomes their investment with open arms and is committed to fostering a world-class business environment.
Additionally, a survey by the Global Times Institute showed that 79 percent of Chinese and global business executives are very confident or confident in China’s economic development in 2024. This highlights the growing trust in the booming Chinese economy.
As the Chinese Government continues to amplify policy support, the confidence of foreign-invested companies operating in China is poised to reach unprecedented heights. China’s determination to become even more open to business collaborations, despite already being among the world’s leading open economies, is an attraction for foreign investors amid a turbulent global landscape.
China’s reliable and stabilized economy, cost-effective assets, and low inflation have been identified as attractive factors by Cao Heping. He foresees China’s economic growth could reach 5 percent or even higher in 2024. This bullish optimism, guided by the Chinese Government’s assistance, will help private sector enterprises navigate through potential hardships and reinforce their confidence, thereby leading to increased investment.
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