Professor CHEN Xiao from the Department of Accounting of the Tsinghua University School of Economics and Management (Tsinghua SEM) recently told the Economic Information Daily that, despite all of the considerable challenges arising from the COVID-19 pandemic and geopolitics, the Chinese economy undoubtedly has bright long-term prospects. He suggested that the government should cut taxes to help enterprises bring down their operating costs and take action to boost the activity and fluidity of the market.

"It's obvious that the overall logistics in China have improved a lot. But we still need to take the impact that the international market has on Chinese companies seriously," said Professor CHEN, adding that the Chinese government and companies need to think about how to maintain a competitive edge on the international supply chain while facing rising costs of labor and raw materials.

Professor CHEN said Chinese companies should seize the opportunity to make themselves stronger by investing more in technological innovation. Meanwhile, the Chinese government should further cut taxes and interest rates to help the companies reduce their operating costs, he said. It should further pursue the tax-for-fee reform, reduce the proportion of indirect taxes, and increase that of direct taxes, CHEN added.

Professor CHEN said that the Chinese economy has a bright outlook in the long term. "Chinese people are resilient and hardworking. We have a group of highly responsible and driven entrepreneurs. It is very impressive that managers and their employees are able to understand each other and work together to deal with difficulties during the pandemic," he said, adding that the assiduity of Chinese people is a major driving force of the Chinese economy. "The company owners that I know have encountered many difficult problems during the pandemic. But they say they won't let any of their employees go or give up until they have exhausted all possibilities," he said.

Professor CHEN said that another driving force of the economy is China's modern and well-developed infrastructure. "The networks of expressways, rails, and airways lay a solid foundation for China's economic development and allow Chinese companies to gain competitive advantages in the international market," he said.

Editor: REN Zhongxi