The Chinese economy has been the envy of the world for many years with its blistering growth unmatched and unparalleled by any other major economy. That of course, has changed somewhat in the recent years, with headwinds tempering its growth. The fastest growing economy in the world is currently India, as China turns its attention to correct the problems pertaining to pollution, domestic debt, and poverty.
That, of course, does not take away from the fact that China, the second largest economy of the world, continues to be an engine of world economic growth. An idea of this can be obtained from the sheer volume of work undertaken by Chinese translation agencies. All the same, things don’t look particularly rosy for China on account of the higher interest rates prevailing in the U.S. and the looming threat of a trade war.
Nevertheless, the going was good for the Chinese economy in 2017, when it really accelerated for the first time since 2010. One could give some of the credit for that to the army of behind the scenes workers and facilitators- Chinese translators, Chinese interpreters, linguists who perform document translation services, and so on. 2018, however, does not look like being a year of high growth with the Chinese government focusing largely on managing financial instability. This implies that they would be happy with modest growth, as long as financial turbulence is reduced.
The importance of the Chinese economy managing these headwinds rises from its impact on the global growth outlook. The good news is that the Chinese economy has so far done a good job of managing the challenges. The manufacturing export orders, for example, achieved a six-month high. This brings us back to the important role that Chinese interpreters and Chinese translators play in facilitating international trade.
That being stated, the growth of the Chinese economy this year is expected to be a modest 6.5%, which is the slowest since 1990. The biggest threat to the Chinese economy comes from the ballooning debt to GDP ratio, which some say may hit 320% by 2022. The primary step required to be taken to prevent this from occurring is the stricter implementation of financial regulations, which may cause complications by way of slowing down construction activity that may have a ripple effect on other sectors of the Chinese economy.
For those who are unduly pessimistic about the Chinese economy, it would do well to remember that judging the strength of an economy, especially that of a dynamic nation like China, tells one only half the story. That it grew at a modest 6.7% obfuscates the fact that China has fared quite well in the early stages of a trade war with its transition to an economy that is consumption-driven. This occurred, in spite of the government doing its best to curtail debt.
The creditable economic growth achieved by China last year puts it in a stronger position to tackle its pressing problems of debt and environmental pollution. That’s the thing about years of maintaining high growth rates. Higher borrowings led to a downgrading of China’s sovereign debt ratings and severe degradation of its environment. That apart, there were social tensions arising out of the migration of millions of workers to the cities that often involved separation from children.
The Chinese government is rightly prioritizing tackling these problems in real earnest over chasing economic growth simply for the numbers. Though there has been a lot of talk about a trade war between the U.S. and China, for now, it doesn’t seem to have had much of an impact, as the Chinese economy grew as much as 6.9% in the first quarter of 2018, a figure equivalent to what was achieved in the second quarter of 2017.
As a matter of fact, the Chinese government remains sanguine that the growth figure for the whole year of 2018 would be as high as 6.5%. That would still be lower than what was achieved last year, but still way high than what the U.S. can hope to achieve. However, there are economists who predict that there might be a further slowdown for the Chinese economy by the end of the year.
The state of the Chinese economy is a matter of interest and concern to the rest of the world because of its sheer size and the impact it has elsewhere. The jury is out on how China will manage the growth of its economy and whether it will continue to temper its growth so as to take care of the pressing problems of debt, pollution and the mass dislocation of people. What the world needs to take into account, however, when taking a call on that is that China, as an economy, is in the process of transiting from an export-driven manufacturing hub to more of a domestic consumption-driven economy.
In a sense, this also presents an opportunity to nations like the U.S. to tap into the vast Chinese domestic market. Helping them do so would be a host of Chinese translation companies, conference interpreting services, telephone translation services. and so on. The Chinese economy may no longer be outperforming the world in a manner that completely dazzled it, but it has already made incredible progress. People who visit China are amazed at how modern and futuristic the country’s infrastructure is. Looking back at how China used to be known more for its endemic problems and poverty and seeing what China has now become tells us that China has come a long way indeed.
It is now on the verge of becoming a middle-income country with a decent standard of living for its nearly 1.4 billion people, which is unprecedented in the history of mankind. China remains the country to watch in the 21st century. In the meantime, there will be crests and troughs, but China will go on, as it has for thousands of years in history.
