Ambassador Wang Published an article Titled "China's Development Benefit the World" on Dominican Newspaper
2012/11/13

China's Development Benefits the World

 

There is a rising concern over China's economic prospect in recent months, as China has become a more and more important stakeholder in the international arena. According to the half-year statistical data released by National Bureau of Statistics of China on July 13, 2012, China's growth rate of the 2nd Quarter fell to 7.6%, below 8% for the first time in the past three years, which further deepens worries about China's economic slowdown in future. Actually, it is groundless to assert that China will mire into recession.

First of all, China's economic slowdown in recent months is in conformity with the anticipative aim of its macroeconomic control. Since the Reform and Opening Up launched in 1978, China has made great development achievements. The GDP rises on average 9.7% annually in the past 34 years and has ranked second place since 2010. On the other side, China is facing challenges from shrinking demographic dividend, rising demand for raw materials and greater necessity for environmental protection, etc, which will impede China's sustainable growth in the long run. Under these circumstances, promoting adjustment of economic structure and the transformation of economic growth mode become necessary choices. In the Twelfth Five-year Plan for National Economic and Social Development (from 2011-2015), Chinese Government pared the nation's economic growth target to 7%, so as to achieve harmonious development of population, natural resources and environment. For example, recently, Chinese government puts forward policies restricting overinvestment and speculative transaction in real estate market, to alleviate the financing risk; it is committed to avoid the traditional economy growth model of "high consumption, high pollution and low efficiency" and thus eliminates many backward factories; China also lower the pace of investment in fixed assets to improve investment structure and relieve itself from the overdependence on investment. All of these measures impede rapid growth in the short term, while will improve the quality of China's development. At present, China's economic fundamentals are still strong and resilient. With adjusted economic structure and modified development mode, China's economy will regain vitality.

Secondly, there is still much space for China's adjustment over its fiscal policy and monetary policy, which will provide sufficient liquidity for its consecutive economic growth. In recent years, China's ratio of deficit to GDP and national debt to GDP, two important gauges to measure a nation's economic condition, are below 3% and 20% respectively, which are far under the international alert standards. China's fiscal income keeps a rapid pace of 20% year on year, providing sufficient fiscal guarantee for macro-control measures. As for monetary policy, the declining CPI (Consumer Price Index, the gauge to evaluate the inflation rate) in recent months clears the road for further monetary measures.  Since December, 2011, China has lowered the rate of deposit reserve for three times. This year, it lowers the benchmark interest rate for twice. These measures will result in increase of money supply and credit scale, then growth of investment and consumption and finally the economic resurgence.

Finally, China still has great potential for rapid economic growth. China is now at a critical point of rapid industrialization and urbanization. Its urbanization rate is no more than 51.27% by 2011. According to international experience, the urbanization will cease only after the rate rising to 70%. Considering China's present population of 1.3 billion, there will be at least 300 million people moving from the rural to urban areas in the coming 20 years, equivalent to the total population of USA. Rapid urbanization requires tremendous investment in fixed assets. Another great potential of China is its household consumption, which is also one of the troika of a nation's economic growth. Take the statistical data of 2008 for example, China's consumption rate (a gauge to evaluate its contribution to economic growth) is just 35.3%. In contrast, the rate of India is 54.7%, and that of USA amounts to more than 70%. With the transformation of China's economic development pattern, China will expand its domestic demand and adjust its structure of income distribution, to enhance the role of consumption in promoting economic growth.

Chinese government believes that, China's prosperity will benefit the international community in addressing world economic crisis and promoting world peace and development. Just like most of the other nations, China's economy is also undergoing a relatively sluggish state amid the context of international financial crisis. Against this background, China enacts practical measures based on its national circumstances, and realized stable development. Since 2008, as the developed countries had an economic slowdown, China's economy rose on average by over 9% annually from 2009 to 2011. China's prosperity brings confidence and support to the recovery of world economy and provides driving force for the resurgence of other economies. For example, in 2009 while the crisis is most rampant, China's import volume rose by 2.8%. China was then the only nation whose import rose in the major economies. According to the aforesaid half-year statistical data in 2012, China's import volume rose by 6.7%, making further contribution to the strong, balanced and sustainable growth of world economy.

The world today is undergoing major development, major adjustments and major changes. The impact of the international financial crisis continues to deepen and world economic recovery remains difficult and tortuous. There is profound transformation in relations between countries and the international system, presenting a growing number of new issues to the international community. Against the context of economic globalization, no nation can achieve development in isolation of the world. Facing serious challenges due to the uncertain economic prospect, each country has to deepen international cooperation to realize common development.

China has declared to the rest of the world on many occasions that it takes a path of peaceful development and is committed to upholding world peace and promoting common development and prosperity for all countries. China cannot develop itself in isolation from the rest of the world, and global prosperity and stability cannot be maintained without China.

Latin America and the Caribbean (hereinafter referred to as "LAC") today is a major emerging power and play an increasingly important, constructive role in global economic governance, sustainable development and other critical issues. In spite of the geographical distance, in recent years, the relations between China and LAC have embarked on a fast track of development, showing sound momentum of all-dimensional, wide-ranging and multi-tiered growth. China has become the second largest trade partner and third largest source country of investment of LAC. China will exert its efforts to advance its comprehensive and cooperative partnership with LAC with utmost sincerity and raise our practical cooperation to a new level.

The visits of President Hu Jintao and Premier Wen Jiabao in late June started a new chapter of the relation between China and LAC. During the G20 Summit, President Hu called for increasing right of speech for developing countries in world economic governance to promote strong, sustainable and balanced growth of world economy. Premier Wen exchanged in-depth views with related heads of government on the bilateral relations and issues of common interest, and reached broad consensus. Premier Wen announced that, China would buy more manufactured goods and high value-added products from LAC so as to achieve balanced and sustainable growth of our trade and brought our trade to over US$400 billion in the next five years.  Premier Wen's proposals also includes setting up the Cooperation Forum and a regular foreign ministers' dialogue mechanism with the CELAC Troika, launching a China-LAC agricultural ministers' forum, putting in place an emergency food reserve for natural disaster response and humanitarian relief, establishing a special fund for our agricultural cooperation and development and a special loan of US$10 billion to facilitate our cooperation in infrastructure development, and offering 5,000 scholarships to LAC in the next five years.

China, is ready to join hands with LAC, to share weal and woe, and to usher in a new era of lasting friendship and common development.

 

 

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