Yuan Gangming: Automotive sector's rapid growth to balance out real estate sector's decline over the long haul


The following is a summary of Yuan Gangming's comments during a roundtable discussion at the 47th Tsinghua University Forum of China and the World Economy held at Tsinghua University, Beijing, on July 6, 2024. Yuan is Honorary Senior Researcher at Tsinghua University's Academic Center for Chinese Economic Practice and Thinking (ACCEPT).  


On July 6, 2024, the 47th Tsinghua University Forum of China and the World Economy, hosted by Tsinghua University's Academic Center for Chinese Economic Practice and Thinking (ACCEPT) in partnership with the School of Economics and Management Alumni Center, was held on campus. Honorary Senior Researcher at Tsinghua ACCEPT, Yuan Gangming, participated in a roundtable discussion at the forum alongside other distinguished guests where he discussed the significant contribution that the automotive sector's rapid growth has made to China's overall economic development.


On July 6, 2024, the 47th Tsinghua University Forum of China and the World Economy was held inside the Weilun Building's main lecture hall on campus at Tsinghua University's School of Economics and Management. The biannual event was hosted by Tsinghua University's Academic Center for Chinese Economic Practice and Thinking (ACCEPT) under the theme of China's 2024 Mid-Year Economic Update. During the forum's proceedings, Sun Maosong, Honorary Senior Researcher at Tsinghua ACCEPT, participated in a roundtable discussion alongside other distinguished guests where he discussed the significant contribution that the automotive sector's rapid growth has made to China's overall economic development.


Yuan Gangming started off by analyzing some of the main challenges facing China's economy, having especially taken note of the impacts on the economy from the real estate market's downswing. He has come to accept the view that China's economy in general is indeed coming under strains, which is particularly the case given ongoing readjustments in the real estate sector. Although real estate prices have fallen, the situation is nowhere near as bad as the bursting of the Japanese real estate bubble in the 1990s. China's real estate bubble has precipitated a reasonable pace of decline, with the sector moreover expected to stabilize and recover to a certain extent.


Despite all the challenges, Yuan also sees bright spots in China's economic development, with the rapid growth of the automotive industry being a prime example. He believes that the outstanding growth trajectory for the country's auto industry is not simply a flash in the pan, but instead is likely to make a longer-term contribution. China's auto exports have already put the country in the top spot in the world, surpassing Japan's auto industry export performance at the peak of its development, which has therefore generated a new source of growth for the domestic economy. Yuan pointed out that the automotive industry is currently the fastest growing sector in China, with a growth rate of more than 30% that far exceeds the average level, and to some extent has made up for a decline of more than 20% in the real estate sector. The rise of the auto industry has not only balanced out the declines in other segments of the economy, but has also forged a new path for China's economic development. At the same time, in terms of global competition within the auto industry, Chinese auto companies are expected to continue nonstop in their pursuit of technological innovation, maintaining their competitive advantage through technological upgrading and substitution, and further consolidating their dominant position in the international market.