China's slow down has upside
Updated: 2015-04-14 09:31
By HUA SHENGDUN in Washington(China Daily USA)
The economic slowdown in China may be good news all around, according to experts at a conference in Washington.
"We should welcome, not fear, the slowdown in China," said Steven Barnett, China division chief of the International Monetary Fund, at the Center for Strategic and International Studies in Washington on April 10. "It's good for China, and it's good for the world."
The slowdown in China marks the transformation of an economic growth pattern to a "slower, but safer and more sustainable growth path", according to Barnett.
China's 2014 economic growth reached its slowest rate since 1990. The GDP grew 7.4 percentfor the whole year, while the official target was 7.5 percent, according to the statistics bureau's report released on January 20.
Since the economic crisis in 2008, China's economic growth pattern had been unsustainable, which could be exemplified by the rise of credit, according to Barnett.
Barnett regards China's economic reform agenda announced in 2013 as "a good news", since a sustainable economic development "depends on reforms", he said.
"It (the reform agenda) will transform the economy to a more balanced and sustainable growth path. The result of the growth path is to be more sustainable, also more inclusive, and more environmental-friendly," he added.
Major initiatives, including a relaxation of the one-child policy, further freeing up markets, and reforms on state-owned enterprises (SOEs), taxations, and the welfare system were spelled out in the Third Plenum of the Chinese Communist Party's 18thCentral Committee in 2013.
The main objective of the economic reform agenda of 2013 is getting the government out of resource allocation, and giving the market a "decisive" role in resource allocation, according to Arthur R. Kroeber, senior fellow of foreign policy at Brookings-Tsinghua Center.
"So you see that China's success is not an accident, but reflects the willingness of undertaking bold reforms," said Barnett.
Asked about how China's slowdown is also beneficial to the world, Barnett stated that the current slowdown would lead to more income in the future. With economic reforms, income could be 5 percent higher by 2020, or about 1 percent of global GDP.
"It seems like a priceworth paying…for a much higher income in the future," he added.
Adam Posen, president of the Peterson Institute for International Economics, agreed on Barnett's positive view on China's slowdown, saying that this means "more imports and more investment (in the Asia Pacific region)".
Although China faces economic growth downhill, the slowdown in China is actually stabilizing, said Vice-Premier Zhang Gaoli at a conference on March 22.
"There are also bright spots, for example, employment, services, high-tech industries, new industries, private investment and innovation," he said.
Zhang saw the slowdown as an opportunity to improve quality and efficiency, and to change the growth pattern and "adjust structures to adapt to slower economic growth".
Liu Xiaoxian in Washington contributed to this story.