German Embassy statement cites business inequality
China's economy remains resilient and promising, and faces good long-term prospects, the People's Daily emphasized in a front-page report on Wednesday, where it noted that the economy was showing a "new pattern" and entering a "new historical stage."
The People's Daily report was published on the same day as the country's annual Central Economic Work Conference, which summarizes the country's economic operations for 2016 and charts the course for domestic economic policy in 2017, according to media reports.
Meanwhile, a statement published by the German Embassy in China on its website Wednesday stated that the world would listen if the Central Economic Work Conference would send "credible signals of further opening and reform."
The statement questioned whether the signals for further reform were clear enough. "The keywords seem to be stability, security and unified thinking, not bold reform, equal competition and liberated thinking."
The embassy's statement focused on unequal treatment between domestic and overseas companies and protectionism in the investment arena.
Systematic opening-up
Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, responded to the statement by saying that China has made "systematic improvement" in creating a fair investment environment.
Such efforts include consolidating the negative list mechanism, enlarging free trade zones and streamlining the approval system for overseas investors, Bai said, adding that China has given many favorable policies, like tax incentives, to overseas companies.
"At a time when China's economy is slowing, we should open up more to overseas investors, but opening up does not mean ignoring supervision. In some sensitive areas, we should take a tough stance against overseas capital, and this is the same case in other countries as well," Bai said.
He noted that the German government has turned down the acquisition of German chip manufacturer Aixtron by a Chinese company. "This can be seen as a type of protectionism as well."
Achievements and flaws
China has made economic achievements in 2016, such as stabilizing the domestic economy and cutting excessive industrial capacity, said experts.
November economic data released by the National Bureau of Statistics on Tuesday showed signs of stability for the domestic economy, with bright spots in certain areas, like consumption.
Liu Xuezhi, a senior analyst at the Bank of Communications, told the Global Times on Wednesday that downward pressure still exists, but that the speed of the economic slowdown will decelerate in 2017. He predicted that GDP growth would reach 6.7 percent and 6.5 percent, respectively, in 2016 and 2017.
China had a GDP growth of 6.9 percent in 2015.
He also noted that the government's mission of cutting industrial glut is "in place" this year, particularly in sectors such as coal and steel.
However, Feng Liguo, an expert at Beijing-based China Enterprise Confederation, said that there were flaws in economic missions carried out this year.
"The work of State-owned enterprises reform, for example, is too slow and empty so far. The work of cutting industrial glut also has problems, as the mission has been mostly forced by local governments upon private enterprises, which runs counter to the market rules of the industries," Feng said.
Challenges remain
According to Liu, as the government tightens its grip on real estate, sales and investments in the housing sector might shrink in 2017, which would lower growth in the housing market and other relevant sectors such as cement and furniture.
Feng said that dealing with financial risks will also be a challenge in 2017, as the government is still grappling with a depreciating yuan and capital outflows.
How to boost new driving forces, such as high-tech industries when China's traditional industries are declining, will also be a difficult point, Feng said.
Besides the domestic economic transition, China may also be affected by global economic uncertainties, Liu said, noting that possible protectionist policies from US President-elect Donald Trump might hurt China's exports, and the impact of Brexit on the global and domestic economy will gradually show in 2017.
Feng said that the global economy will be "eventful," but that China can make use of such a situation and push domestic industries to invest beyond its border.
