This article interprets the current situation and challenges of China's economy from the perspective of international comparison, and draws the following main conclusions.
Firstly, although there are some similarities between China's current economy and Japan's economy in the 1990s, China's aging problem is less serious. Moreover, China's potential growth space still exists, and our asset bubble is far less than that of Japan at that time. As a result, it is not necessary for us to exaggerate the current difficulties and bearish the development prospects of China's economy.
Secondly, RMB has been fluctuating within a relatively stable range, mainly caused by a strong dollar environment. It has no long-term depreciation trend. Therefore, from this perspective, China's macro policies still have considerable space for looseness.
Thirdly, it is difficult for India to shake China's industrial advantageous position due to its prevalence of protectionism and the significant gap in its supply chain and infrastructure compared to China.
Fourthly, China's economic growth potential still has some advantages, including a unified domestic market and a complete industrial chain. We need to constantly emphasize the importance of reform and marketization, and seek reform dividends in the process of solving resource mismatches, which remain the core driving force for China's next economic growth.
