Cleaner, greener growth

Updated: 2011-09-15 07:46

(China Daily)

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IN THE TEETH OF EUROPE'S WORSENING SOVEREIGN debt crisis, Premier Wen Jiabao's vow that China will increase its investment in Europe signals not only China's confidence in the eurozone economies but also its resolve to assume a bigger role in propelling global growth.

Such an assurance will surely be welcomed by investors who have become increasingly jittery in the wake of the continuing twists and turns of Europe's sovereign debt crisis.

However, the more important message that Premier Wen delivered at the ongoing "Summer Davos" in Dalian is not about addressing the concerns that EU countries have to face and fix right now. Instead, it was Wen's words on the conference's theme Mastering Quality Growth that demands full attention from policymakers from home and abroad.

Wen's elaboration on the resilience and restraints of the Chinese economy is certainly meant to highlight the necessity of fighting inflation while pursuing more balanced and sustainable growth.

As expected, China's slowing economic growth so far this year was largely a result of the government's tightening measures to bring inflation under control. Yet, with the country's consumer inflation 6.2 percent in August, well above the government's annual target of 4 percent, it is still far too early for Chinese policymakers to loosen their guard against inflationary pressures.

To sustain the country's growth, Premier Wen is calling for a greater sense of urgency among governments at all levels to forge ahead with structural reforms and boost consumption to fuel long-term economic growth.

After more than three decades of nearly double-digit growth, China has keenly realized that the quality of its growth can no longer be allowed to play second fiddle to the speed of expansion. If the Chinese economy is going to serve as a powerful growth engine for the world in the coming years, it must be cleaner, greener and more self-reliant. To this end, Chinese policymakers as well as domestic companies and consumers still have a lot of work to do.

At first glance, Premier Wen's emphasis on quality growth might look far-fetched to his counterparts in both Europe and the United States.

Policymakers in these countries have relied heavily on unconventional fiscal and monetary measures to fix their financial and economic woes.

But the stubbornly high unemployment and looming debt crisis have laid bare the ineffectiveness of such attempts to buy real and strong growth with cheap credit and impractical stimulus measures.

In the absence of painful reforms to adjust and adapt their economies to the 21st-century global economic reality, these debt-laden rich countries are unlikely to embrace quality growth that can be a genuine source of job creation.

Their policymakers should abandon the fantasy that their economies might be able to inflate their way out of the crisis.

It is time to recognize that quality growth is the only way for a lasting global recovery.

(China Daily 09/15/2011 page9)