In the eyes of some Western observers, the Lunar New Year figures indicate a plunge in the Chinese economy, as factories have suspended operations and shops closed during the seven-day National Holiday. Some doomsayers even call such scenarios the 'Chinese economic crisis'. But the reality is that the Chinese people are celebrating the Lunar New Year.
Behind such humor comes a question worth pondering: why no economic crisis has ever occurred in China over the past several decades?
When the 1997 Asian financial crisis swept almost across the region, stock prices plunged, factories were shut down, and workers were laid off, in countries such as Thailand, Malaysia, Singapore, Japan and South Korea.
When the global economic crisis took place in the US in 2008, major developed economies, including Japan and the European Union, were severely affected. Even until today, some countries haven’t walked out of the shadow of the crisis completely.
While other countries were hurt by regional or global financial and economic crises, China saw its economy grow by 9.5 percent on average over the past 40 years. The country has contributed more than 30 percent to global economic growth for several years in a row.
China’s GDP increased by 174 times between 1952 and 2018. Between 1979 and 2018, its average GDP growth was 9.4 percent on a yearly basis, much higher than the global average at around 2.9 percent in the same period.
The country has grown into the holder of the largest foreign exchange reserves. Its foreign exchange reserves exceeded $3 trillion by the end of 2018, the largest in the world for the 13th consecutive year.
The expanding economy, rising national strength, broad market and sufficient potential ensure that when faced with external risks and crises, China can cope with the circumstances timely and effectively.
Undoubtedly, China has experienced economic fluctuations under the influence of international economic and financial crises since the founding of the People's Republic of China 70 years ago.
There were major bouts of inflation happening around 1988 and 1994, respectively, and risk of capital outflows was high from 1991 to 1994 due to fluctuations of the yuan exchange rates. In addition, the financial and economic crises in 1997 and 2008 both had an impact on China’s foreign trade and financial sector.