Continued urbanisation has the potential to support China's long-term growth

China remains on course to become the dominant economic power of the 21st century, according to HSBC Group Chief Executive Stuart Gulliver. He said that while current macroeconomic conditions were “challenging”, China was “in better shape than many believe”.

Services now account for around half of Chinese GDP, up from just over 30 per cent 20 years ago

Mr Gulliver was speaking in Hong Kong at the HSBC China and RMB Forum: Rising to the Challenge, Shaping a Different Future. The conference brought together more than 250 of the bank’s customers to hear presentations and debate on the future of China’s economy.

China’s rapid economic development in recent years has equipped the country to negotiate today’s headwinds, Mr Gulliver argued. He said: “Services now account for around half of Chinese GDP, up from just over 30 per cent 20 years ago. And while manufacturing and exports are currently weak, consumption remains robust, contributing two thirds of GDP growth in 2015. Taken together, this means that China’s economy is simply not as susceptible to external shocks as it once was.”

Continued urbanisation and high levels of education will support the country’s growth over the long term, Mr Gulliver added. He said that reform of the “hukou” household registration system will pave the way for China’s poorer regions to catch up with the richest.

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