Economic Daily front-page headline publishes again: Rejecting the "China's Economic Governance Failure Theory"

【Editor’s Note】

Today’s issue of the Economic Daily published a commentary on the front page under the headline “Refuting the ‘China Economic Governance Failure’ Theory,” written by a commentator. This is the paper’s third consecutive day to run a commentator’s piece in a prominent front-page position, refuting erroneous commentary by foreign media that distorts China’s economic situation.

On April 1, the Economic Daily ran, on the front page, a commentator’s piece titled “Refuting the ‘China Impact Theory.’” The article pointed out that behind the “China impact theory” lies Western anxiety; sensationalizing the “China impact theory” cannot obscure the fact that current trade protectionism is obstructing world economic development.

On April 2, the Economic Daily ran, on the front-page top slot, a commentator’s piece titled “Refuting the ‘China Economic Runout Theory.’” The article said that the strategic resolve to move steadily and the wisdom to respond—continuously refreshing China’s coordinates for moving toward something newer and better—have also silenced voices about China’s economy “running out.”

When judging China’s economic trends for the full year, how the opening plays out—how well it “gets off the ground”—often has a major impact.

The data show that in the first two months this year, the national residents’ consumer price index (CPI) rose 0.8% year over year, showing a mild rebound; in February, the CPI rose 1.3% year over year, with the growth rate reaching the highest in nearly three years. The total value of goods trade imports and exports was 7.73 trillion yuan, up 18.3% year over year. The added value of high-tech manufacturing above a designated size increased 13.1% year over year; the added value of the digital products manufacturing industry grew 8.8%. All of these were clearly faster than the overall industrial growth rate.

A range of key indicators drawing upward curves fully proves this: a strong start and a good opening.

However, before the release of major macroeconomic data for January through February, many market institutions had relatively large differences in their forecasts for the major indicators. This both reveals the complex and severe nature of the current domestic and international environment, and reflects the fact that strengths and pain points coexist in China’s economic operations; hope and difficulties intertwine, with challenges and opportunities standing together. As a result, even performance that exceeds expectations has again prompted the question: Where does China’s certainty actually come from?

To answer this question, the logical framework and implementation outcomes of China’s macroeconomic governance system are an important perspective.

Lead expectations with development planning, calibrate policy orientation, and highlight strategic resolve—

Looking at China’s economy on a five-year horizon makes it possible to clearly see a firm direction for development and strong policy resolve. From “the First Five-Year Plan” to “the 15th Five-Year Plan,” China’s development is not about “stepping on a banana peel and sliding wherever you end up,” but about anchoring the theme of building our country into a modern socialist country—drawing one blueprint all the way through, and doing one set of work after another.

Once a plan is approved, it carries rigid constraints: annual policies are advanced within the framework of long-term planning, not overturned and redone. Once you understand the five-year plan, you can grasp clearly defined policy expectations. The formal promulgation of the “Law of the People’s Republic of China on National Development Planning” has further established a rule-of-law linkage mechanism between national development plans and annual plans. It breaks down the major indicators set in planning into the annual indicator system and ensures comprehensive balance among years. This institutional design helps transform medium- and long-term high-quality development goals into annual tasks that are quantifiable, actionable, and verifiable, facilitating step-by-step advancement and sustained implementation. This is precisely the basis of confidence for China’s development amid the market environment.

Smooth the cycle with macro policies to promote development and pursue progress while maintaining stability—

Amid winds and rains in development, and even choppy seas, China emphasizes not only innovation in policy tools, but also innovation in policy combinations. By strengthening both counter-cyclical and cross-cyclical adjustments—through the use of a series of macro policy tools to promptly cushion short-term fluctuations in economic operations that may occur, and by incorporating considerations for medium- and long-term economic development—while balancing short-term cyclical fluctuations and medium- and long-term structural issues, it is an effective approach to continuously enhance the effectiveness of macroeconomic governance.

At the beginning of the year, the People’s Bank of China released several adjustments involving structural monetary policy tools, and separately set 1 trillion yuan for re-lending to private enterprises. The Ministry of Finance, together with multiple departments, introduced fiscal interest-subsidy policies for loans to small and micro enterprises and for personal consumption loans. In addition, it clarified that the deficit ratio will be set at around 4%, with a deficit size of 5.89 trillion yuan, boosting market expectations for total demand. The scale of general public budget expenditure will, for the first time, reach 30 trillion yuan, with targeted allocation to “key points.” The integrated issuance and deployment of 1.3 trillion yuan in ultra-long special treasury bonds and 4.4 trillion yuan in local government special bonds will precisely guide financial resources to key areas of “two major areas of investment” and strategic sectors such as “artificial intelligence+” … To drive high-quality development, China has ample policy tools.

Use institutional building to make up for shortcomings, remove deep-seated obstacles, and solidify a solid foundation—

Addressing insufficient effective demand is a key task for China’s economy at present, and all incremental policy measures are organized around it. For example, policy focus centers on creating jobs and raising the level of social security and welfare, so that people can feel that there will be safety and support for their livelihoods in the future—without needing to accumulate more precautionary savings—so that individuals can use more of their income now. At the same time, combining short-term policies with long-term institutional development solves the deeper problems of insufficient domestic demand and weak consumption from the standpoint of economic development model. By advancing in parallel measures such as deepening reform of the fiscal and taxation system, accelerating the urbanization of transferred agricultural population, and easing restrictions on market entry in the services sector, a long-term mechanism for expanding domestic demand and an effective institutional arrangement to boost consumption are formed. These steps help develop more of an economic development pattern driven by domestic demand, pulled by consumption, and fueled by endogenous growth.

In the first two months of this year, the total retail sales of consumer goods by value grew 2.8% year over year, accelerating by 1.9 percentage points compared with December 2025. Retail sales of services grew 5.6% year over year, clearly faster than the growth rate of retail sales of goods. Fixed-asset investment grew 1.8% year over year, whereas in the whole of last year fixed-asset investment fell 3.8%, achieving a shift from decline to growth. The stronger reality of domestic demand as the main driving force is enough to show that policy support and reform-driven innovation are both delivering tangible results.

China’s macroeconomic governance seeks dynamic balance across multiple goals and coordinated efforts across multiple tasks. In recent years, amid profound and complex changes in the domestic and international environment, China’s macroeconomic governance system has demonstrated, under extreme external shocks, the capacity for regulatory resilience, and the growth certainty released by the conversion of internal drivers. Once you understand such logic and face up to the reality of China’s economic development toward something newer and better, the so-called erroneous theories promoted by certain foreign media about “ineffective China economic governance” will collapse of their own accord.

People with clear eyes know that under accelerating change unseen in a century, China’s ship sails with the wind and steadily presses forward through the waves. At the same time, by attending to and responding to a series of changes in the world, changes in the times, and changes in history, it contributes China’s wisdom and China’s solutions toward moving the international order in a direction that is more just and more reasonable. Some people cannot accept the historical changes in the balance of international power, and will still resort to arguments with no factual basis to confuse right and wrong, stubbornly clinging to outdated, hegemonic rules and hegemonic order.

No matter how high the waves rise, China will remain steadfast in doing its own business well, and will remain steadfast in expanding high-level opening to the outside world. It will inject strong impetus into the world economy with the certainty of high-quality development, even as the world faces stumbling blocks.

（Source: Economic Daily）