China’s economy to grow steadily in long term

18th May, 2019 09:34:30 printer

TOKYO: China's economic development is expected to steadily advance in the medium and long term despite the US-China trade friction that only has a limited effect, Japanese experts said.

The United States has recently raised tariffs on Chinese goods again, causing a broad drop in world stock markets. However, it will not do much to slow down China's economic development in the long term, said Hidetoshi Tashiro, chief economist at Sigma Capital Ltd., in an interview with Xinhua, reports Xinhua.

The Chinese economy has the potential development ability to resist the drag caused by the trade spat, Tashiro said, listing two main reasons.

Firstly, China has outstanding technological advantages, he said. As the mobile communication network will officially enter the era of 5G this year, Time Division Duplex mode will become much more useful than Frequency Division Duplex. While Frequency Division Duplex still dominates in Japan's current 4G, China has adopted Time Division Duplex mode since the 3G era and accumulated technologies for the new era, the economist said.

If 5G construction is officially launched worldwide, there will be a huge demand for Huawei and other Chinese IT enterprises. Similar to Japan's economy which achieved growth through "building a nation by electronics" in the 1970s and the first half of the 1980s, the construction of 5G around the world will be a tailwind for China's economy, Tashiro said.

Secondly, China will gain a new demographic dividend. China's National Development and Reform Commission in April issued documents on key tasks for new urbanization in 2019, advocating that rural migrant population should be moved to cities with 1 million to 5 million permanent residents, he said.

The expert said that about 100 million people are expected to move to cities in China in the future, bringing the similar enormous growth that Japan saw after the Second World War.

From 1959 to 1975, young people fresh out of rural middle and high schools in Japan went to live and work in cities like Tokyo from the countryside, Tashiro said.

This period coincided with Japan's rapid economic growth from 1955 to 1973. With the increase of urban population, there is a huge new demand for infrastructure construction, housing, electrical products and furniture, which had become one of the pillars of Japan's rapid economic development, he explained.