ASEAN KEY DESTINATIONS
Where is the Chinese economy going?
By Paul A. Ebeling, Jnr
The recent Central Economic Work Conference in Beijing attracted worldwide media attention with the BBC describing it as a meeting of great importance.
The Central Economic Work Conference conveyed the message that the international financial crisis is not over. India's Economic Times reported that the Central Economic Work Conference pointed out the world economy is expected to continue to grow next year, but there remain many unstable and uncertain factors.
This is China's basic judgment for the economic situation in 2011, and is also the most likely development path for the world economy next year.
The World economic situation has grown very complex over the last 3 years since the outbreak of US sub-prime crisis in the summer of 2007. In the autumn of 2008, after the outbreak of the international financial crisis, the world economy fell into the worst downturn since the end of World War II.
In face of that critical situation, China and the international community helped each other overcome the difficulties in the framework of the Group of 20 (G-20) by strengthening macroeconomic policy coordination and other measures. From the second quarter of 2009, the world economy gradually began a slow but long-term recovery.
From the second quarter of 2010, with the effect of stimulus policy by developed economies gradually diminishing and the private sector not receiving the "relay baton" to drive the economy, the economic recovery for developed economies slowed down. The EuroZone sovereign debt crisis added new uncertainties for the prospect of a World economic recovery.
Currently, the world economic recovery is uneven. It is generally good for emerging and developing economies, while the developed economies are facing more problems such as high unemployment rates, weak recovery for key industries such as real estate and banking, high government deficits, and public debt.
It is worth noting that although strengthening international financial regulations and improving global economic governance has become an international consensus since the breakout of the financial crisis, progress has been slow. The underlying institutional and mechanism reasons causing the international financial crisis have not yet been eliminated.
Meanwhile, the USA, the EuroZone and Japan are all facing problems of rising government deficits and public debt. In particular, the risk of sovereign debt crisis in EuroZone has not been eliminated. Add to that the lingering shadow of protectionism and the ultra-low benchmark interest rates and quantitative easing monetary policies of Western countries could trigger problems like a new "Hot Money" speculation, asset bubbles and inflation pressure.
Looking forward to 2011, the world economic recovery may not be really smooth. With a variety of uncertainties, only China and the other members of the international community to strengthen cooperation and solidarity can the whole world rid itself of the adverse effects of the global financial crisis as soon as possible and promote the sustained recovery for the global economy. This is China's viewp[oint and also the consensus of the international community.
The Central Economic Work Conference put forward that China will adhere to mutually beneficial and Win-Win opening up strategies, and expand international economic cooperation.
For more than 30 years of reform and opening up, China's economy has had closer ties with the world economy. China's development is inseparable from the world, and the world's development also needs China.
During the international financial crisis, China's economy maintained steady and rapid growth, making a positive contribution to the economic recovery in Asia and the world.
In 2011 China's development needs more efficient access to international markets. China needs stability and expansion of external demand to maintain stable and healthy development of its export industries.
China needs the introduction of International advanced technology and management experience to help achieve Green development and sustainable development and to facilitate the adjustment of economic structure and the leap-forward development of industries.
Meanwhile, China will continue to share with the World its development opportunities. China has become an important global market.
During the process of the World economic recovery, China is maintaining strong growth not only in exports but also in imports. China has become an important trading partner and export market for many economies in Asia and even the rest of the world.
From the electronics components of Japan and South Korea to fruits from Southeast Asia, from Australia's iron ore to agricultural products in Latin America, from oil from the Middle East to Africa's mineral resources, the so-called "Chinese demand" resulting from the steady and rapid growth is becoming an important positive factor to promote world economic recovery. According to a recent report, multi-national companies have confidence in the prospects of the Chinese market.
Sales of t US auto giant, General Motors, in China, for example, have reached 2.17 million for the first 11 months of this year, with the number expected to reach more than 2.5 million units next year.
In addition, China is expanding its foreign investment and helps contribute to an increase in local employment, improvement of infrastructure and economic and social progress.
As a major global investment destination, China continues to improve and standardize its investment environment. It is worth noting that China's rapid economic development prompted many Chinese enterprises to go to international capital markets.
From Singapore to London and New York, a large number of innovative Chinese companies listed overseas provide an important channel for global investors to participate and share in China's development. Most China analysts believe that China will shake off dependence on industrial investment and exports to develop personal consumption and services, which will also help the world economy.
The Central Economic Work Conference put forward that China will accelerate the strategic adjustment of economic structure and enhance coordination and competitiveness in economic development.
This is the main direction of economic development for China in Y 2011 and even for the period from Y 2011 to 2015. This is also the internal requirement for the World economy to achieve strong, balanced and sustainable growth.
At the G-20 Pittsburgh Summit in the US in September 2009, the world's major developed economies and major emerging economies jointly put forward the "Strong, sustainable and balanced" growth framework.
In this year's G-20 Toronto Summit and Seoul Summit and Asia-Pacific Economic Cooperation (APEC) meeting in Yokohama, Japan, achieving balanced and sustainable growth was the consensus of all participants.
The goals are: expanding domestic demand, improving quality and efficiency of investment, accelerating the growth of service industries, coping with climate change, and developing a green economy.
China is doing all these things to optimize the economic structure and achieve a comprehensive, coordinated and sustainable development for its economy. Accelerating the transformation of economic development fulfills the need of self-development, but also conforms to the trend of world economic development. This is China's own economic development expectation and contribution for the world economy to achieve "strong, sustainable and balanced" growth.
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