China's economic transformation matters greatly
Updated: 2012-03-08 10:31
BEIJING - China's efforts to transform its economic growth towards a more balanced direction matters a great deal to the world's vital interests, foreign experts say.
China, along with other emerging economies, is taking an ever ballooning share of the burden to spur global economic growth.
That's while other major economies, including the US and some of the developed European countries, were still struggling to avoid a double-dip recession amid a flaring Europe-wide debt crisis and the after-effects of a global financial meltdown.
It has already become a global consensus that China's contributions to restoring a balanced and sustainable world economic growth are indispensable.
More and more Chinese will be lifted out of poverty and enjoy better living standards with the growing economic expansion, said Arvind Subramanian, a senior fellow at the Washington-based Peterson Institute for International Economics.
"If China grows, the rest of the world benefits", as China will increase its demand from other nations and helps keep the world economy dynamic, he added during a recent interview with Xinhua.
Many experts also believe China's decision to set its 2012 GDP growth rate to 7.5 percent, a 0.5 percentage point lower than that of last year, indicate that the Asian power has started to prioritize the quality over the speed of its economic growth. That change, they believe, would benefit China and the rest of the world.
A recent Reuters report said that China's acceptance of a slower rate of growth shows that the gradual rebalancing of the global economy long sought by world leaders is on track.
Economic success of the past teaches that consumption is a major force for stimulating economic growth. In the US, consumption represents about 70 percent of the country's total GDP output.
Comparatively speaking, China has huge potential to explore in expanding consumption.
Steven Dunaway, adjunct senior fellow for international economics at the Council on Foreign Relations, told Xinhua that is would be very hard for China to continue to expand its profits through trade due to a sluggish world economic recovery.
"In these circumstances, the best thing for China to do is to concentrate on development of its domestic economy and domestic demand," he said.
Steve Roach, Yale professor a former president of Morgan Stanley Asia, said in a recent article that China is doing a "far better job" in managing its economy than most give it credit. It even offered some lessons in macro policy strategy that the rest of the world should heed.
He also said China has waged a very successful campaign in controlling its inflation, which "has long been the nation's most destabilizing economic threat."
"China has plenty of ammunition in its monetary policy arsenal, " while in contrast, central banks of the United States and European nations "are out traditional ammunition," and "have been forced to rely on untested and dubious liquidity injections," Roach said.
He added that China is cut from a very different cloth than the advanced economies of the West. Long focused on stability, Beijing is more than willing to accept short-term costs of a "growth sacrifice" to keep its development on track.
AIA Group Chief Executive and President Mark Tucker also viewed China as a "exceptionally well-managed economy," adding that he remained confident of China's growth because of the flexibility given by the country's policy instruments and financial backing.