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KPMG exec: Private sector to keep China's economy steady in 2019

By Zhong Nan | | Updated: 2019-01-23 13:35
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Employees assemble a CT scanner at a production line of Neusoft Medical Systems Co Ltd in Shenyang, Liaoning province, on March 16. [Photo by Zhang Wenkui/For China Daily]

Advanced manufacturing, growing consumption power, urbanization and the digital economy, especially contributed by the private sector, will help China put its economic growth on firmer footing in 2019, said a senior executive from global consultancy KPMG.

Many opportunities will also come from the recent trade and economic talks between China and the United States in Beijing, which showed signs of moving in the right decision, and the government's measures to help small and medium-sized businesses to unclog lending channels and remove funding pressure, said Honson To, chairman of KPMG in the Asia-Pacific region and China.

As China has growing demand for infrastructure such as more high-speed railways, roads and regional transportation, To said an important factor is to increase the supply of "new infrastructure", such as 5G networks, cloud computing, internet of things (IoT) and artificial intelligence infrastructure.

To made the remarks, noting that after a broad-based recovery in 2017, global economic growth moderated in 2018 and the trend is likely to continue in 2019. International organizations, such as the International Monetary Fund and the World Bank, have both lowered their projections for 2019 world growth. China may also see a further moderation of GDP growth in 2019, as it shifts its development focus from speed to quality.

"High-end technological innovation is critical to achieve China's goal of high-quality development. Strengthening construction of these new infrastructures will boost the development of the new economy and ensure the country stays as a leading player in the global digital economy," he said during the 2019 World Economic Forum in Davos, Switzerland, from Jan 22 to 25.

Many world leaders and top business executives will meet in the forum to discuss global issues such as economic growth, trade tensions and Brexit.

"Advanced manufacturing has already become another trend of China's future development," said To, adding that, while growth of overall industrial production has slowed in recent months, growth of high-end manufacturing has remained strong and significantly outpaced the overall growth.

"As a global network of professional services, KPMG operates in 153 countries and regions. With China's further reform and opening-up, we believe there will be increasing interactions between China and the world," he said. "We can leverage our global network to help more Chinese companies going out and more foreign companies invest in China."

Against the backdrop of weakening global growth and heightening geopolitical uncertainties, China has maintained stable growth in foreign direct investment (FDI) against a gloomy global climate. Its FDI went up 3 percent year-on-year to $135 billion in 2018, while that of the world's total and developed countries slumped 41 percent and 69 percent, respectively, in the first half of 2018, data from the Ministry of Commerce show.

"I think this is a particularly admirable achievement. It highlights that China remains an important and attractive investment destination for many foreign companies. KPMG has an important role to play to facilitate this trend," he said.

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