Question: It was reported that the Chinese economy is at risk of long-term recession, similar to Japan's situation late last century. What is your comment?

Embassy Spokesperson: The Chinese economy has distinct advantages and its fundamentals remain unchanged. It will not fall into long-term recession. First, China has the advantage of independent policy-making. Last century, Japan, under the pressure from the United States, signed the Plaza Accord and was forced to devaluate its currency, which led to an economic bubble and a long-term recession. While, China, under the strong leadership of Comrade Xi Jinping at the core of the Party Central Committee, has an institutional advantage that enables collective efforts to advance major initiatives. Thanks to it, a new development pattern is rapidly taking shape, high-quality development is being promoted on all fronts, and strengths in various aspects of development are continuously improving, with new growth drivers growing at a faster pace.

Second, China has a vast domestic market. Japan's population is less than one-tenth of China's. Over the past decade, China's per capital national income increased significantly from 5,910 to 12,604 US dollars, and China now has the largest middle-income group in the world with over 400 million people. It is estimated that, by 2035, this number would exceed 800 million, meaning that China will remain the world's second-largest consumer market and an emerging middle and high-end market.

Third, China has ample policy reserves. Late last century, Japan's entire social balance sheet was severely damaged, and it was unable to reverse the vicious cycle of economic contraction and weakening expectations. In contrast, the Chinese government has rich experience in macroeconomic regulation and abundant policy tools. Since last August, China has stepped up efforts to implement fiscal, monetary and other macroeconomic policies, extended a batch of interim policies such as the optimised tax incentives, and unveiled a series of new practical measures in support of the real economy and private enterprises. So far, this policy configuration has already shown its effect, continuously fostering positive factors. The Chinese economy is rebounding with a consolidated foundation.