BEIJING: High-tech investment and exports remain key bright spots of China’s economy, supported by strong global demand for advanced manufacturing and Beijing’s innovation-driven development strategy, according to an economist from HSBC.
China has built a strong competitive edge in electronics, green technology and advanced machinery, with overseas demand continuing to support exports, said Frederic Neumann, chief Asia economist, co-head of Global Investment Research Asia and managing director at HSBC.
The recent energy price shock has reinforced demand for renewable energy technology and electric vehicles, where China’s economy excels, while the rapid expansion of artificial intelligence (AI) infrastructure worldwide has fuelled demand for all types of electronics, further boosting exports from China, he said.
Beijing’s current emphasis on innovation-driven growth has boosted demand for high-tech investment and goods, including AI-related investments, robotics and biotechnology.
Neumann expects both domestic and overseas demand for high-tech products and services to remain resilient through the second half of the year, providing important support for the growth of China’s economy.
With exports and high-tech manufacturing continuing to perform strongly, policymakers are likely to keep their focus on strengthening domestic demand.
In this regard, any efforts to help accelerate the restructuring of local government finances will be key, he said.
“Not only do local governments have to restructure their existing debt, but they also need to acquire new source of financing to fund their expanded social service commitments,” he said.
“This is especially important because relying on land sales as a revenue source is no longer adequate amid the adjustment in the property market.” — China Daily/ANN
