China: ‘Fundamentals’ the same despite slowdown

Steady trail: A worker pulls elevator parts in a factory in Haian, China. Chinese diplomat Liu Pengyu says the country remains optimistic about its growth trajectory. — AFP

WASHINGTON: The Chinese embassy in Washington pushed back against interpreting China’s economic slowdown as a sign the country is facing deeper issues, acknowledging the rocky nature of the nation’s post-Covid rebound but stressing optimism for its growth trajectory.

“A post-Covid economic recovery will be bumpy from time to time,” Chinese embassy spokesman Liu Pengyu told reporters in an online briefing Tuesday. “But the fundamentals sustaining China’s long-term wealth will remain good, remain unchanged.”

His comments, which included some praise for the US-China economic relationship, come amid mounting concerns that China’s US$18 trillion economy is decelerating at an unhealthy pace, instead of the expected resurgence after years of Covid-19 restrictions.

Liu also pointed to tighter monetary policies across many major economies, particularly in the United States and European Union, that are aimed at slowing inflation but have risked tilting nations toward recessions.

“The global economic recovery has been fragile and the major developed economies have adopted contractionary policies that caused spillover impacts,” he said, adding that global markets remained unstable and unpredictable.

A run of disappointing Chinese economic data has prompted some analysts to predict China will miss its growth target of about 5% for this year, and that its shift to a slower growth path means it will struggle in the long-term to overtake the US as the world’s top economy.

Beijing has taken some incremental steps to revive growth, but the country’s massive housing sector, and related industries from cement to steel, continue to slump. Amid the slowdown, President Xi Jinping’s government has so far declined to unleash a massive stimulus package to avoid deepening the nation’s debt.

In the comments on Tuesday, Liu pointed to the country’s official 5.5% gross domestic product growth figure for the first half of the year, saying China had struggled against “headwinds” and that its economic growth remained “faster than many major developed economies.”

Separately, Liu praised last week’s trip to China by US Commerce Secretary Gina Raimondo, calling it an “important part” of recent high-level US-China diplomatic engagement, which has also seen visits by Secretary of State Antony Blinken, Treasury Secretary Janet Yellen and US climate envoy John Kerry.

“It conveyed the signals for more dialogues, for more communication, for more cooperation to stabilise the bilateral relationship,” Liu said. “It also enabled the progress in resolving economic and trade differences, establishing lines of communication, promoting practical cooperation and enhancing people to people exchanges,” he added, without going into details.

At the same time, Liu criticised the United States for Trump administration-era tariffs that remain in place, unilateral sanctions against Chinese officials and the Biden administration’s recent restrictions on US investment in China.

The diplomat’s positive comments – which included that US and Chinese interests “are deeply intertwined” and that Beijing opposed decoupling – contrast with those from China’s top spy agency, which blasted the Biden administration’s strategy toward Beijing as being “doomed to fail”.

The Ministry of State Security repeated accusations that the United States was trying to contain China, and said “China will never let down its vigilance because of a few ‘beautiful words’ from the United States”. — Bloomberg