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The European Union leaders will visit China and hold the 25th China -EU summit this week.
Japan is facing political uncertainty after the ruling coalitions suffered a historical setback in the Upper House election.
The New Development Bank has funded 120 projects totaling US $40 billion for global thousands in the past decade.
Welcome to Road Today, a news program with a different perspective.
I'm Keanna in Beijing.
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Our top story, President of the European Council Antonio Costa and President of the European Commission Ursula von der Leyen will visit China on Thursday.
China's foreign ministry says President Xi Jinping will meet with the two leaders, while Premier Li Qiang will co -chair the 25th China -EU summit with them.
So what's on the agenda and where are China -EU ties headed next?
To unpack these questions, joining us on the line is Professor Cui Hongjian from the Academy of Regional and Global Governance at Beijing Foreign Studies University.
Professor, many say the 25th China -EU summit comes at a critical juncture in bilateral relations.
In your view, what are the core issues that require urgent dialogue and resolution between China and the EU at this stage?
As we know, this year is a very important and critical time for the bilateral relations between China and the EU.
Not only both sides will celebrate their 50th anniversary of diplomatic linkage, and also because of a you know a huge change and also big uncertainties now in the context of international relations and global economy and some other so I think now is time for both sides not only just to memorize the history and to learn something more from experience and especially to help both sides get some some more convenience consensus to insist principle, for example, the one -one cooperation and also programmatic cooperation.
And also, yes, I think both of us have a need to find out more creative solutions for current issues and also even bilateral divergences, including as we know, the so -called economic friction and also geopolitical tensions So yes, I think it's a very, very remarkable time, not only in a historic sense and also for, you know, future and for both sides to get some more consensus and to support this sustainable cooperation.
Professor, we know there is common ground between China and the European Union, especially in trade, in climate, etc., but also some clear tensions, right?
The most recent one is the European Union announced its 18th package of sanctions against Russia, which also listed Chinese companies and financial institutions, a move is both unjustified and counterproductive, says China Ministry of Commerce.
So what's your take on this?
How can both sides manage differences to avoid escalation?
Yes, I think that's right.
A very complex context for the current situation for China -EU relations.
Even on one side, both sides share some views on economic cooperation and even for some geopolitical tension solution.
But in practice, both sides have some disagreement, economic and also geopolitical issues.
So yes, I think that China doesn't want to see any kind of severe over -effect of this Ukrainian crisis.
into its relations with the EU.
That's also, I think, a continuing stance for China that China -EU relation should not get any negative impact from outside.
And even China -Europe relations will not aim at any third party or some other.
So now the problem is they need to get some more positive response from the European side.
So far, I think that not yet.
both sides to reach agreement on how to deal with the relations between different stance of European Union and China, Ukrainian crisis and their bilateral relations.
But certainly I think that China will continue to get communication with European side and to pursue any kind of consensus in future.
But of course, at the same time, in practice, China will show its very clear stance to oppose any kind of unilateral sanctions from any institutions or any countries, including the European Union.
Building on that, Professor, President Xi Jinping set to meet with EU leaders.
Based on past high -level engagements, how important in your opinion is political -level communication in advancing practical cooperation between the two sides?
What key signals might this meeting send about the future direction of China -EU relations?
As you know this time we were visited by two presidents from European Union institutions.
There will be a leaders' meeting between European Union's leader and the Chinese leader.
And also, there will be a meeting between President Xi and President Costa and the president von der Leyen.
Certainly, I think this meeting between President Xi and the two European leaders will be important important to help for both sides to convince still, I mean, China and the European Union are strategical partners, and also they should have some more common ground on any big and critical issue.
Always, as we know, this high -level exchange between China and the EU played a very, very leading role to help the mutual understanding and the mutual trust. And especially, it will give some direction and also give some principles for these bilateral relations.
So I do believe this time, once again, the high -level exchange between two sides will not only make a conclusion for the past 50 years, and also will give a very clear direction and a more positive message for the bilateral relations for another five or ten years.
Building on that, given the current global challenges from sluggish economic recovery to growing geopolitical complexity, how much room is there for China and the EU to cooperate on multilateral reforms and global governance?
Which global issues could the summit potentially address with joint positions or actions?
According to my understanding so far, I think China and the EU are the two constructive players to push forward this promotion of global governance in the area of climate change, green transition and the digital economy and AI or some other earning, I mean, common challenges for the human community.
So I think now it's important and critical for both China and the EU to look for some consensus even, as we know, for this difficult time for climate change and the green transition, and even how to deal with this, as we know, the deficit of global security.
How could we help some other players to get out from this security dilemma?
And I think not only Ukraine and also not only the Middle East, even some other potential crises could be on the table of discussion between China and EU.
And certainly once there is more consensus between the two sides, there will be more support for this reform of global governance.
And even I think it could help for the international community for any reasonable solution for any crisis or conflict.
Professor, you mentioned technological collaboration.
It has become a focal point in China -U relations.
Do you see prospects for building new frameworks in areas such as the digital economy or green technologies through this summit?
How might both sides strike a balance between openness and their respective concerns?
From the official stance of both sides, undoubtedly, the green economy and the digital economy could be very, very important areas for both sides to get some more cooperation in the future.
Not only for both sides, they have similar or common policy goals for these two areas for development and also I think now it's time for both sides to get joint efforts to make some common regulations or rules to help development for the new areas.
But of course I think the most important thing now is how could both sides to find out any solutions to push forward this this cooperation not only in politics and also in areas or in corporations just like we look at the uh recently I mean the e -waste negotiation I think it could be I hope that a successful case for both sides to find out to join the efforts to deal with these challenges not only just for policy and also for for the actions Professor this is the 25th summit clearly a long -running any dialogue so could you elaborate in your view what should both sides focus on to solidify the foundation for long
-term cooperation yes I think it's time for both sides to make conclusion and to have some more shared experience not only to uh you know memorize a 50 anniversary and also to look for another 50 years cooperation I think firstly yes uh when one corporation and the pragmatic cooperation could be very very important experience and also then a very important principle for the further cooperation and of course I think respect each other I think it's also very important principle and the starting points as we know only we have this you know respect with each other and we can have this mutual trust
and we can have this mutual understanding And of course, finally, I think for China -EU relations, it's important, especially in our day how to deal with any negative impact from outside, from the spillover effect of the relations between other major players could be very, very important issues now.
So I think for the near future, for both sides, they could reach some more consensus, even from continuing communications.
Thanks, Professor, for your insightful analysis.
That was Professor Cui Hongjian from the Academy of Regional and Global Governance at Beijing Foreign Studies University.
Coming up, Japan is facing political uncertainty after the ruling coalition suffered a historic setback in the upper house election.
This is Rail Today.
Stay with us. China has broken ground on what's said to be the world's largest hydropower station high on the Qinghai -Sizang, or Tibet Plateau, a new engine for green energy.
But beyond clean power, what will the massive project on the Yarlong -Zangbo River mean for China's vast west and its South Asian neighbors?
What challenges lie ahead, and could it reshape regional cooperation?
Join us as we explore the facts, the controversy and high -stakes engineering behind this mega project on this week's chat lounge wherever you listen to podcasts and cgtn radio this is world today let's move to japan's political landscape japan is facing fresh economic and political uncertainty after the ruling coalitions suffered a historic setback in the upper house election over the weekend.
It marked the first time since the Liberal Democratic Party's funding in 1955 that the ruling party or coalition has lost the majorities in both houses of parliament.
The defeat deals a blow to Prime Minister Shigeru Shiba, but he vows to stay on with a key U .S. tariff deadline just days away.
What does this mean for Japan's political future?
To delve into this, let's have Yang Xiyu, Research Fellow at China Institute of International Studies.
Thanks for joining us, Mr. Yang.
My pleasure. So this is a historic moment.
Japan's ruling bloc has lost its majority in both the lower and upper house.
What does this mean for the Liberal Democrat Party and the bigger picture of Japanese politics?
First I'll answer this question both for the ruling party LDP but also for the structure of Japan's society.
I think the first time for losing the majority in both houses is not an accidental event.
Actually it's a signal that means the acceleration of the declining of the LDP as a ruling party.
Party. Everyone knows that LDP has been a long time, a long time ruling party.
Originally, it could keep the ruling party as a single party in the rules.
However, with the gradual declining, the LDP has to make a coalition with the other parties to keep the majority.
But this time, even in the structure of the coalition, they also lost the majority.
That means the turning point from which the declining of the LDP in the political structure of Japan has been started.
With the losing of the majority in both houses, we will see two significant structural changes.
Number one, within the party, the power struggles, the political divisions will be intensified.
And secondly, in the whole Japanese political structure, the ruling part of the LDP as a ruling party's position position will be further and further eroded and the declining process of the LDP will be accelerated.
So this event has become a historical points to indicate the acceleration, not only the LDP's position, but also the structure of the Japan society.
Could you please further elaborate on this, the fundamental problems of this party?
As you said, he has long dominated Japanese politics.
What are the key factors behind this setback this time?
This time, on the surface, the key factor for the failure of the coalition ruling parties lies in the economic front.
Say, on one hand, the very low, weak economic growth, plus the rising of prices, say inflation.
Most of Japanese people have suffered such a difficult time for quite a while.
That produced more and more angry complaints and so on that composed a very strong base to oppose the ruling party's policy and the ruling party's position.
So in other words, the economic factor was and is the key one that accelerated the declining of the coalition parties' position in the political structure.
But to broadly speaking, not only the economic, from wide range of social issues, especially the quickly rising sentimental movement about Japan First. Something like Trump's magnetism says American First. But the Japan First sentiment is not a single ideological movement, but also a movement reflecting their unsatisfied claims and sentiments against the ruling party.
So the wide range of structural issues in society has composed a strong opposition trend to erode gradually the base of the ruling party.
So, in short, both economic factors and the wide range of social issues have become increasingly serious challenges facing the ruling party.
In the near future, the increasing challenges will further damage the base of the ruling party.
Now we are hearing loud voices inside the LDP saying Ishiba shouldn't stay in office, but he suggested he's not stepping down.
What kind of power struggle are we looking at here and what short -term impact would it have on Japan's governance?
Well, I think the division within the LDP has been away.
The strong powers among schools within the party has a long history until now.
So with the background of the big failure of this election, it's quite natural that that the different schools of the party strengthened their efforts to force the Yishma step down.
However, everyone knows within the LDP, everyone knows that stepping down can solve partially the power struggle within the party.
However, on the other hand, the stepping down of the Party's leader will further intensify the structural problems and power struggles within the Party.
So now, the ruling party is at a dilemma.
Either stepping down of the leader or keeping the leadership of the Ichiba will produce different challenges.
And both of the challenges are too serious to be met by the politicians within the LDP.
So, the failure of the election has become a trigger to intensify the challenges, to intensify the division, the power struggles within the LDP.
That is one of the reasons why I said from the failure of the election, the ruling party LDB's position will be accelerate decline.
If we go by past examples, losing the majority usually means the Prime Minister has to resign.
But what if Ishiba holds on, what strategies could he employ to retain power?
It's a very deep question, facing not only the ruling party, but also facing Japan as a whole.
So for the ruling party I think the failure of the election means more uncertainties facing the coalition ruling party because the weaker position of the coalition ruling party, will be more difficult to meet multiple challenges, both domestically and externally.
But on the other hand, if the head of the coalition ruling party, say Prime Minister Ishiba, step down, that will produce more uncertainties both domestically and externally.
For example, existing ruling party -led Japanese government has quite several rounds of negotiations with the United States about trade.
If the existing prime minister step down, the existing administration of Japan is sharply shifted, that will make the negotiation more complicated than now, and by the same token, the sharp shift of the administration of Japan will produce more uncertainties in domestic politics.
politics. That is why I said the dilemma facing the ruling party, not only facing the prime minister, but also facing the LDP as a whole.
Mr. Yang, one of the biggest winners in this election is the populist and conservative Sun Sato party, which surged from just two to 14 seats.
Could you introduce this party to us and explain what factors contributed to their rapid rise?
I think on the surface, their successful election came from their very striking slogan or claims about Japan first. That really bent up a lot of supporters among people.
But behind the surface reason, I think in Chinese we say 人心思变.
That means the more and more Japanese people like to see changes in the current state of the Japanese economic structure, social structure, and the change for the wide range of the public policies.
So change of their demands among people drive the new party sharply rising.
And the key question is the quickly rising of the new party will be sustainable as rising a power, political power or just a period phenomenon?
Thanks. That's a very good question.
Thanks, Mr. Yang Xiyu, research fellow at China Institute of International Studies.
This is RARE Today.
We'll be back after a short break.
You've been listening to Road Today with Mike Anna in Beijing.
A transport official says the total length of China's operating high -speed rail tracks expanded 10 ,000 kilometers from 2021 to 2024.
China's total operational length of railway lines reached 162 ,000 kilometers in the first four years of the 14th five -year plan period.
Minister of Transport Liu Wei said the country expanded its certified civil airports to 263 by the end of 2024.
This marked an increase of 22 airports since the end of the 13th five -year plan period.
So for more on this, Zhao Ying spoke with Professor Liu Baocheng, Director of the the Center for International Business Ethics at the University of International Business and Economics.
China has completed six major transportation tasks ahead of schedule, including the expansion of highway networks, broader adoption of the Beidou satellite navigation system, and increased use of new energy buses.
So what do these achievements reveal about the Chinese government's priorities for development and modernization in recent years?
the lending and delivery of the all these key transportation networks they reflect a strategic alignment between chinese infrastructure development technological innovation and also taking into consideration of the environmental sustainability that is there to continue to foster Chinese modernizational agenda and to serve currently the macroeconomic growth by bringing a higher level of mobility of all types of economic resources.
So this expansion underscores Chinese firm commitment to enhance the domestic connectivity, to reduce those logistic bottlenecks and to foster regional integration, particularly between the inland area versus the coastal area, between the rural area versus the urban area.
I think another highlight is the Beidou Satellite Network because that's there to enhance further the Chinese technological self -reliance.
By relying on Chinese own indigenous digital infrastructure, structure, we're able to support with the better confidence with regard to the autonomous driving, smart cities, smart logistics, and also precision agriculture.
The new energies are also being applied to the Chinese transportation network.
So all of this is there to review a very clear national strategy that is broadly delivered.
So using the transportation technology, not just as a tool for mobility, but also as a fundamental engine for balanced growth and low carbon transformation.
Yeah, China invested heavily in this transportation network, and during the first four years of the 14th five -year period, fixed asset investment in transportation reached over $2 trillion, and that marks a 23 % increase.
How has this investment translated into tangible benefits for Chinese citizens and businesses?
Over the past five years, this investment has translated into very widespread, measurable benefits to both the individual Chinese citizens and also to the broader Chinese economic growth.
For the Chinese citizens, these investments have enhanced mobility, mobility, reduce the transportation time, and improve the comfort level and service accessibility, particularly in those rural and central western regions.
So projects like the high -speed rail expansion, the rural roads upgrades, and the urban transit integration, they have narrowed the urban and rural divide.
provide, they improve the living standard of the people, make commuting more efficient and more affordable.
So in supporting the businesses, these infrastructures, they help to reduce the logistics time and lower the cost in the transportation, so that also benefit not only the business supply supply chain, but also through e -commerce to benefit the individual households.
I think more importantly is that, because of such a strong connectivity, we are able to employ a multi -modal transportation corridor by linking not only the Chinese major cities and ports, but also to weave a broad network on a global basis to support the Chinese export drive and also to support the integration with the rest of the world in terms of the holistic supply chain.
Officials have highlighted China's progress in transportation technology.
Earlier, you mentioned the Beidou satellite, but we are also seeing China brands from high -speed rail and expressways to ports and delivery networks.
How do these developments shape China's position in the global transportation landscape?
I think that's a very broad but a great question.
So the connectivity on the physical part and also the integration on the digital part, they combine to support the world -class infrastructure innovator and also the Chinese export drive.
So the homegrown system like the high -speed trains, the express management platform, the automated port terminals, the nationwide smart logistic networks, they have all earned great recognition on a global basis.
So every traveler in China from other countries would really sum up for Chinese great achievements.
But that also shapes the China's global brand, so therefore, we are not only there to facilitate to the Chinese export of the import right, but also we are also able to export our equipments and expertise, particularly along the Belt and Road, by building more of the projects from seaports to highways and to the satellite network, etc. So that helps not only to bring more of the service income into China, but also to help to pave the ground to work in close partnership on a logistic basis with our key partners.
Yeah, we know that China has used this five -year plan system for decades to guide its development.
But in a world shaped by a rapid technological change like AI, new energy or other emerging fields, can a five -year planning cycle still provide meaningful strategic guidance?
Well, actually, Chinese five -year plan is no longer as rigidly mandatory as before.
So it does provide a blueprint and vision, but it also keeps a differentiated approach to different sectors of business and to different regions.
So therefore, it serves as a policy coordination framework that is there to continue to guide the operation of local government and also to give hints as what are those key areas businesses and academics can really focus on.
So definitely the artificial intelligence, quantum computing, the biotechnologies, etc. So they are the marker for the frontier technology breakthrough.
So therefore, I think the government will focus more on the subsidies and other type of tangible support to such sort of innovation.
During the next five -year planned period, we also would like to expect that more of the support will be given to those small and medium -sized enterprises, which may turn out to be hidden champions to support the Chinese innovation.
And in the meanwhile, by linking more closely a lot of the supply chain, from academia research to the application to the intellectual property protection and also to the practical spread of the Chinese key technologies around the world and particularly along the Belt and Road Partnership will be the key drivers for the next five -year plan for China to grow and to grow with the rest of the world.
That was Dr. Liu Baocheng, Director of the Center for International Business Ethics at University of International Business and Economics.
The new development bank set up by BRICS Nations has financed 120 projects worth US $40 billion since its launch in 2015.
Now marking its 10th anniversary, the Shanghai -based bank is poised to play a bigger role in supporting global thoughts countries as they tackle shared development challenges.
For more on this, joining us on the line now is Dr. Yao Shujie, Chang Kong Professor of Economics at Chongqing University.
Welcome, Professor.
Hi. The New Development Bank is the first multilateral development bank created and led by emerging and developing economies.
Over its first 10 years, it has helped defend key infrastructures across the global south.
In your opinion, how has this support helped these countries break through development roadblocks and move toward its own modernization path?
The NDB has played an important role in driving the economic development of the British countries.
Now, the original five British countries have also expanded to include a number of other countries into the economic bloc.
The NDB mainly focuses on a couple of strategic areas, particularly infrastructure and environmental projects.
Now we know that in in in Brazil, in India, Russia, and also South Africa, and also the Africa continent, most of the country, the economy has lots of potential.
But they are highly constrained by the infrastructure, particularly the transportation system, the ports and also the aviation industry.
Another constraint is the environmental pressures because of the waste recycling, water treatment, which are very important for the general health of the people and the livelihood of the developing country where we see a fairly huge population.
But the demand for these kinds of investment is increasing all the time, so the concerted effort led by the British countries, China, Brazil, India, Russia, and South Africa.
They have a concerted effort to pull the financial muscle together so that some large projects can be invested with low cost, with some strong guarantee from the government.
Then, Professor, compared with traditional financial institutions like the World Bank or IMF, what sets Is NDB a part when it comes to actually meeting the needs of developing countries?
Yeah, the World Bank and IMF, they play different roles.
The World Bank also lends money to the developing countries.
IMF is providing financial stability credits.
But they cover lots of countries and also focus more on the interests of the rich countries rather than just the poor countries.
so the brics you know the NDB is focusing on the southern country or in all the southern country are developing country including China although China is relatively more advanced compared as compared to the other members Russia also is more advanced and you know the cost of investment by NDB is highly highly focused on those purpose.
As I mentioned the infrastructure and also the environmental project.
They are the key elements of preventing economy's sustainable growth.
And by dissolving this constraint, I think the energy of the British country could be legalese for sustainable economy development and the general improvement of the public in particular the bank has approved 120 projects worth about 40 billion us dollars so far covering clean energy infrastructure and more could you please share some examples of the real on the ground impact impact these projects have had in supporting sustainable growth in the global thousand nations yeah yeah lots of good example for example like you know South Africa also now we have Egypt to to join Algeria those country
they the port is very important for instance and the rail system the highway system the the Chinese also make a lot of investment facilitated by the NDB in in Southeast Africa for example like the railway system from Addis Ababa to Djibouti which is not very long is only only 440 kilometres, and the speed is not very high compared to the Chinese speed by 120 kilometres per hour.
For the African country, it's fairly new and fairly high, and it leaves the bottleneck of real traffic transport from the inland area to the coastal area, to the seaport, they facilitate not only the traffic of trade, but also enable the inland regions of this Addis Ababa to build up lots of factories, which is the key elements of the dynamic economic growth in those countries.
I think there are some very good examples in this process in South Africa, you know India and Brazil, they also have similar project of this kind.
This is some of the example that can have a demonstration effect for the local economy and can attract multiple you know investment from other financial institutions such as the Africa Investment Bank and also the the European Development Bank and the local commercial bank to join effort to build the project and also to drive the economy development in the local community.
Professor, now the NDB has expanded beyond the BRICS and brought in new member countries.
It's clearly becoming more global.
What does this shift mean for the bank's international standing and its ability to support developing countries?
There are two points here.
The first point is that the NDP is able to provide financial support for building this project that we just discussed.
Another point is that NDP has proved itself to be very attractive for many new member states.
You know, Egypt is a population population of over 100 million people, Algeria also is a very populous nation in Africa and United Arab Emirates, it is actually relatively rich in terms of per capita GDP and some other countries are also applying to join.
So by next year, I think the new member state would increase from the original five to about 12 countries.
Now this is a very good example that NDB could be very attractive for the new members and these new members, also Bangladesh I forgot, Bangladesh in Asia is also a very big populous country, they are highly lacking in terms of infrastructure in terms of technological know -how and and also experienced to build those projects.
Now, NDB is not only providing the financial support but also provide a technical assistance and also human power.
These are even more important than the money itself because lots of, you know, less developing country, less developed country they are not only lack of capital but they also lack of the talents, the engineering skills to build the project.
So NDB is not only providing the financial support, but also providing the facilitation of technological transfer and know -how to the local country, which is needed desperately in the local economy.
Professor, one last question.
With global protectionism on the rise, what are the NDB's top priorities as it moves into its second decade and how can it better position itself to meet the development challenges ahead?
Investment in international trade are intertwined, you will have more capital flow, it's more more likely to have commodity flow, in that it is international trade.
By building the project, by connecting the countries, the people together, as a much bigger group in the international arena, then it can provide a strong, powerful counteractive effect effect against the tide of anti -globalization and unilateralism.
So I think NDB play a very important role in this regard by connecting investment with trade, by connecting the local regional market with the global market, with enlarged markets so that people share the kinds of effort and increase the resilience of individual countries against international trade protectionism.
Thanks, Professor, for your valuable insights.
That was Dr. Yao Shujie, Chang Kong Professor of Economics at Chongqing University.
Several global financial institutions have upgraded their economic growth forecasts for China China after the country's robust performance in the first half of the year.
My colleague Zhao Yang spoke with Yan Liang, professor of economics at Willamette University.
So Professor Yan Liang, thank you very much for joining us.
Several foreign financial institutions have upgraded their economic forecast for China.
Why are they so upbeat about China's economy right now?
Well, I think as the data indicated, the first half of the year China's growth has been very robust achieving 5 .3 percent of real growth and so i think that really injects a sense of confidence sort of to the foreign investors they're seeing that china is able to really rely on its domestic economy but also be able to continue to maintain a very strong road export performance so all of this i think gives the confidence to these foreign banks to upgrade their growth prospect for china And I think it's very clear this demonstrates despite all these geopolitical tensions and despite the U .S.'s careful
work, China's economy remains very resilient.
I think that is really the reason behind.
And as you mentioned, China's economy grew by 5 .3 percent in the first half of this year.
So what are the main factors that contributed to this growth?
Is this better than expected?
Well, I think it is slightly beat the expectation, even though I think still.
With all the policy support and also I think with China's very resilient trade performance, people do expect the Chinese economy is going to grow continuously in a very consistent manner.
So when you look at the first half of the year, retail sales I think really stands out.
I think with the trade -in program, which has generated 2 .9 trillion yuan worth of revenue since its launch, launch, this has been a really significant boost to the household consumption.
Then you also see industrial production that has always remained pretty robust, especially when it comes to the high tech manufacturing that has consistently grown about nine to 10%.
So I think this means that, on the one hand, you have very strong supply, that you have continued growth in industrial production and industrial upgrading.
trading. And on the other hand, you have this relatively strong demand from retail sales, from government fiscal spending and also from trade.
So we know the first half of the trade, China's exports denominated in the yuan has gone up by 7 .2%.
So this is despite, you know, again, the tariff war from the United States and a relatively notable decline of China's exports to the U .S., but that is more than offset said, by China's growth in exports to ASEAN countries, to European countries.
So all of this just demonstrates that the demand side remains resilient, the supply side remains very robust. And so I think that is the main driver for the Chinese economy.
But of course there's still more room for domestic demand to continue to grow.
So I think policy support will continue to be significant and important in this regard. And for foreign trade, we've seen that the exports were up 8 .6 % year on year in June.
So how do you explain that?
And in the second half of the year, do you think China's exports remain resilient in face of the U .S. tariffs or tariff threats?
I think that is an excellent question.
when you look at the exports we see that the export to the US in June has declined to about 16 percent in dollar terms but that is a deceleration from the May's decline which is 34 .5 percent so on the one hand we're seeing this sort of de -escalation with the United States' trade the you know tariff war so So I think that to some extent helped to boost June's export performance compared to May and April.
So there's some helpful impacts from the deceleration with the trade war with the United States.
But I think more importantly is really to see that China has been diversifying its trade partners and its exports to ASEAN countries have grown really rapidly.
It's trade with the BRI country has accounted for about 50 .7 percent of its total exports.
So what that means, with the trade diversification, the tariff war from the United States, the impact is very much mitigated.
And on the other hand, we're also seeing that China's trade structure has been increasingly diversified and upgraded.
So when you look at electronics and mechanical exports that constitute more than 60 % of China's exports.
So what that means is that with the diversified trade destination and with the upgraded very competitive trade structure, I think this would really continue to budge China's trade and export performance.
Coming to the second half of the year, I think there are some positive factors.
So, on the one hand, the deceleration of the tariff attack from the United States helped.
But on the other hand, I think the front -loading effect will start to fade away.
So, I think it really depends on these two factors, how it affects the trade.
But I think trade will continue to remain strong, but maybe not as fast -growing as 8 % that we have seen in June.
And Goldman Sachs cited a strong global demand for Chinese products and services, and also the positive impact of a series of government policies on consumption and investments.
So do you think the economy needs fresh stimulus for the rest of the year?
Well, I think, yes, global demand is a very important factor in driving China's exports.
So I think that's in addition to China's own advantage, such as diversified trade partners and also upgraded trade structure.
I think the global demand remains a very important factor to drive China's export growth.
But that said, I think, yes, the policy has been really an important factor in supporting China's domestic economy.
As I just mentioned, the trade -in program has been quite successful in supporting the retail sales.
But of course, there are some arguments that, you know, this effect is going to fade away because people have already bought refrigerators.
They have already bought, you know, washing machines.
So how much more are they going to buy in the second half of the year?
So I think what that means is that the trade -in program needs to maybe focus on other items that have not been covered.
So, for example, some more service consumption support, some other, you know, consumption support in, you know, different consumer goods categories.
So, that would be helpful to inject in the new fresh support into the direct consumption stimulus.
Now, when it comes to the broader policy, for example, fiscal policy or monitor policy, I think a lot of policies have been already announced back in you know, national People's congress back in march with very expensive expansionary fiscal policy and there's also monetary policy that been recently signaled by a central bank to for example set up relanding facilities to support consumption to support um you know the housing market and equity market and so on so forth so i think the second half of the year the focus may be to really implement implement some of these policies that have already been
rolled out. So to be able to really double down and to accelerate these policy rolled out, I think will be the focus of the second year.
And the economies of multinational banks attributed China's steady economic growth this year to recovering consumer demand.
So do you think the consumption momentum we've seen during the first half of this year is sustainable?
Because the country's consumer market is already comparable in scale to the U .S. in nominal terms. About 80 % of the U .S. market and 1 .6 times larger in purchasing power parity, right?
Exactly. I think there is the narrative that China's consumption is too depressed, but I think that is really far from the reality.
The fact is that China's consumption market is vast and is growing.
When you look at the first half of this year, the retail sales of consumer goods grew by five percent and so that as you also mentioned the retail market is going to reach seven trillion dollars by the end of this year according to the minister of commerce and as you also mentioned this is comparable to the us size i do think that you know there's room right to continue to boost domestic consumption because that is the real benefits to the households um i think there are some positive factors that we're likely to see consumer demand beginning to rise one is a very strong service demand increase
so when we look at the retail sales for service and that is also growing at you know more than five percent and at the same time we're also seeing the real household uh disposable income that has also grew by 5 .4 you know after you discount the price factor so that is the per capita disposable income of households which is faster than the real GDP growth.
I think this will help to provide some impetus for consumption demand.
That was Yann Leung, professor of economics at Willamette University.
That's all the time for this edition of World Today.
I'm Ge 'Anna, thank you so much for listening.
