Why China’s economic growth is worthy of envy, never mind the scaremongers

Shanghai has been my home for over a decade. In that time, I have witnessed many ups and downs, but rarely have I seen so much scepticism over the Chinese economy.

Column inches are increasingly dedicated to the depreciating renminbi, rising credit and excess industrial capacity. But if you walk around Chinese cities, you will sense the vibrancy, excitement and entrepreneurial spirit in the air.

The numbers also speak for themselves – gross domestic product grew at 6.7 per cent in the first seven months this year. So, in many ways, I feel Western observers are missing the bigger picture, wallowing in bad news just to grab headlines.

True, China has lost its competitive labour cost advantage as wages of Chinese factory workers are now more than double that of their Bangladeshi and Vietnamese counterparts, and Chinese exports are down by some 8.7 per cent this year. But, in my opinion, the country has more than made up for its depressed exports with its rising domestic consumption and investment, particularly in the environmental, tourism, arts and culture, sport, health and senior care industries.

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Job creation has also remained a stabilising factor, with unemployment at just 4 per cent. Investment from foreign companies, meanwhile, continues to flow in, registering a 4.7 per cent year-on-year hike in 2015 as investors shift their focus from traditional to hi-tech manufacturing and service sectors, including financial service and internet applications. In particular, hydro, farming and environmental sectors have all seen 20 per cent investment growth this year. With the central government’s income at 10 trillion yuan (HK$11.4 trillion) this year, we are seeing an uptick in the curve.