China is preparing to make important changes in its economy in the new year. Top economic experts say that China is taking steps towards opening its economy more to the global market. A major reason behind this is the increasing trade uncertainty between America and China.
Newly elected US President Donald Trump has hinted at increasing taxes on Chinese imports, which is likely to increase tension in trade relations between China and America.
China faces economic challenges after Covid-19
China, which is called the second largest economy in the world, is facing many economic problems since Covid-19. Prominent among these are:
- Debt problem of housing sector: China’s real estate sector is burdened with heavy debt, which has increased the pressure on the economy.
- Decline in consumer spending: A decline in domestic market purchases and consumer spending has dented the economic recovery.
- Rising Unemployment: The unemployment rate is increasing, especially among the youth, which is becoming a major obstacle to China’s development.
Impact of Trump government
China’s challenges are likely to increase further after the swearing-in of Donald Trump in America on January 20. In the last term, Trump had imposed strict taxes on Chinese imports. This time also he has indicated to adopt similar policies, which may further increase trade uncertainties between the two countries.
China’s new approach to the global economy
Zhao Chenjing, deputy director of China’s National Development and Reform Commission (NDRC), recently expressed his commitments. He said China is ready to open its economy to the outside world, no matter how challenging the international environment is.
He announced the implementation of several new policies to promote international trade this year. Prominent among these are:
- Advanced Manufacturing
- Modern Service Sector
- Hi-Tech Innovation
- Emphasis on energy saving and environmental protection
Increase in green energy
Efforts are underway to shift China’s economy toward green energy and high-tech innovation. The field of green energy has gained momentum in recent years:
- In 2024, 40.5% of China’s energy production will come from wind and solar power, while in 2023 the figure will be 36%.
- China is now moving rapidly towards becoming a major player in green energy globally.
Demography and social reforms
However, China faces challenges related to changes in its demographic structure. The number of elderly people in the country is increasing rapidly, due to which economic pressure is increasing.
According to Zhao Chenjing:
- Number of childcare centers in China to increase to 1,00,000 in 2024
- The number of facilities for the elderly has reached 4,10,000.
These changes are important steps towards improving the social structure and balancing economic growth.
