(Bloomberg) -- External pressures and China’s aging population are two key economic hurdles facing the country over the medium to longer term, according to a top mainland policymaker.
China needs to respond to the “joint suppression from the external world” by turning adversity into motivation, said Han Wenxiu, executive deputy director of the General Office of the Central Financial and Economic Affairs Commission. This can be done by making breakthroughs in technology and innovation, he told the China Development Forum in Beijing on Saturday.
Han gave an example of China’s booming renewable energy and electric vehicle sectors, initiated as a response to global climate change and carbon neutral goals.
“The new external pressure will force us to adapt to the changes,” Han said. “China will accelerate the push for high-quality science and technology self-reliance and independence while expanding international innovation cooperation.‘
Technology is also at the core of dealing with a shrinking and aging population, according to Han. Solutions include better education of workers to ensure training matches the needs of an upgrade to its industries. China will also seek further growth impetus from innovation, reform and opening up.
The stronger reliance on technology and innovation has become more pressing as new growth sectors can’t yet compensate for the gap left by a slumping property industry.
“Some expect China’s growth in 2024 will be lower than in 2023,” said Li Yang, chairman of the National Institution for Finance and Development and a former adviser at the People’s Bank of China.
“That is closely linked to the fact that after three years of Covid disruptions, we still haven’t found a good new growth engine to replace the property expansion over the past two decades and as strong exports run into obstacles,” Li said on the sidelines of the forum.
China earlier rolled out a “dual circulation” strategy, under President Xi Jinping, with an emphasis on tapping into domestic markets and a reduced reliance on the global supply chain amid geopolitical uncertainties and US technology restrictions.
China maintains that it’s open for businesses and stresses the importance of foreign firms playing an important role in its development.
“China welcomes companies from all countries to come and invest and expect foreign firms to hold a long-term view and develop extensively in the market,” Han said.
(Updates with comments from Li Yang in seventh paragraph.)
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