Stable growth is necessary for both China and the world
Updated: 2012-07-16 22:00
China's GDP grew 7.6 percent in the second quarter of 2012, a rate of economic growth that has remained stable thanks to the effective macro-control and adjustment policies adopted by the central government, says an article in People's Daily. Excerpts:
The deceleration of Chinese economic growth has been the result of a variety of causes at home and abroad. The global financial crisis is influencing demand in developed countries. It is also apparently affecting China's exports, which contribute greatly to the country's economy.
The inflation caused by China's stimulus packages in 2008 has forced the central government to carry out a series of macro-control measures to slow inflation in the real estate market and other markets. Domestic demand and consumption have been limited.
But these costs have been unavoidable, for China has reduced inflationary pressure effectively and avoided a "hard landing" for the national economy. This is significant for the plans to transform China's economic structure and growth.
The slowdown in Chinese economic growth is forcing enterprises to seek out new sources of growth and invest more in technological innovation to meet their need for industrial development. Low inflation is also helping to form circumstances in which production elements' prices can be reformed. So the slowdown in economic growth and low inflation open opportunities for changes in economic growth.
China will not let its economy have a hard landing or sacrifice its economic growth to save some countries from their own troubles.
Most emerging markets are threatened by the sovereign debt crisis now taking place in developed countries, which is actually a new stage of the global financial crisis. Developed economies and the rest of the world have two options for solving these problems. Developed countries should break their addiction to borrowing. They should also set examples to developing countries as they pursue new sources of growth.
Under such circumstances, it is unrealistic for China to maintain the fast economic growth it saw before the crisis.
The proposed adjustments to the Chinese economy not only concern the recovery of the world economy but will also enable China to make bigger contributions to the world economy after the crisis.