Cui clarifies misperceptions of economy

Updated: 2016-02-17 13:23

By CHEN WEIHUA in Washington(China Daily USA)

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Clearly upset with the doom-and-gloom views in the West about his country's economy, Cui Tiankai, the Chinese ambassador to the US, wrote an op-ed arguing that the world's second-largest economy is growing stronger while it is committed to reforms.

Noting a turbulent global economy, Cui said China, sadly and for no logical reasons, is often used as a scapegoat for current global market fluctuation.

"It is imperative that people are clear about the reality behind the worldwide economic volatility," Cui said in the article titled A Prosperous China Benefits the World, posted on The Wall Street Journal website Tuesday evening.

Cui said China's economic growth remains strong, and its contribution to the world economy is still impressive. He cited World Bank data that between 2009 and 2014, China's GDP grew at an average annual rate of 8.7 percent, compared with the 2 percent world average. During the period, China contributed 30 percent of global economic growth.

Even in 2015, China's economic growth rate of 6.9 percent was among the world's fastest, and China contributed 25 percent to global growth.

Cui attributed the growth largely to the middle class, the driving force of consumption in China. According to Credit Suisse's most recent Global Wealth Report, China's middle class, (individuals with wealth between $50,000 and $500,000) now ranks the largest in the world with 109 million members, surpassing the US with 92 million members.

He cited the example of Starbucks. The company is planning to open 2,500 stores in China in the next five years. Starbucks CEO Howard Schultz expressed his optimism in the Chinese market in a WSJ article.

Given the stock market fluctuations in China, Cui admitted that there is room for improvement in market management.

"But China's real economy in the long term has not been harmed since the stock market turmoil began last August," he said.

Many economists have argued that China's stock market, whose value accounts for about 30 percent of China's total GDP, compared with 100 percent in the US, does not really reflect the real economy.

Cui called it false that the Chinese government has intentionally devalued the yuan to boost exports.

While the economic slowdown has contributed, China's currency depreciation is mainly the result of an exchange-rate reform launched last year to follow international standards and to establish a more flexible system linked to a basket of currencies, thus letting markets play the decisive role. "This has nothing to do with boosting exports," Cui said.

Even for the commodities market, Cui said there is still significant demand from Chinese consumers, citing a still-growing demand for grain and oil and a huge demand for US beans and cotton.

The Chinese ambassador believes that structural reforms will bring a brighter future to China's economy and, consequently, greater opportunity to the world.

He described China's 13th Five-Year Plan (2016-2020) as laying out five clear development concepts: innovation, coordination, green development, opening-up and inclusiveness.

Cui said China's leaders are determined to see through structural reforms. "China is, in fact, playing a pioneering role in the structural reform that the global economy desperately needs, hence it should be applauded and encouraged," he said.