China's steady economic growth huge contribution to world

  • Time:2012-06-20
  • source:CCIEE

(People's Daily Online,16:01, June 20, 2012)

While the growths of major economies are generally slowing down, China has successfully managed a steady economic growth. It is a great contribution to the global economy, and will accelerate the global economic recovery and transmit confidence to various countries of the world.

The global economic recovery will not be realized without China

The global economic recovery is slow and “stabilizing the growth” has turned into a hard problem. 

The deputy director of the Financial and Economic Committee under the National People's Congress He Keng believes that the reason behind them is that the world still has not found new economic growth points. Both the United States and Europe are looking for them but so far have not found any. Therefore, the global economic recovery will not be realized soon. In addition, many countries have realized that they must highly regard the real economy, reduce the import and increase the export. The course of using domestic-made products to replace products originally imported from developing countries will take a long time, and therefore the global economic recovery will not be realized in a short period. 

As an important part of the world economy, China’s economic growth continues to slow down under the impact of the financial crisis. However, in the first quarter of this year, China’s GDP grew 8.1 percent and the proportion of current account surplus in GDP has dropped to 1.4 percent, which has made important contributions to the recovery and growth of the world economy. 

“China is the second largest economy in the world and its economic downturn, if severe, can affect the import and further significantly influence the external world, especially the economic recovery of European and American countries,” said Xu Hongcai, deputy director of the Information Department under the China Center for International Economic Exchanges.

Xu said that the GDP growth of China contributed to 50 percent of that of the whole world in the global response to the financial crisis in 2009, which indicates that China has become an engine of the world economy.

Hope for China to fill the global demand gap is unrealistic

The emerging market economies, with China as the representative, are showing sluggish trends but still take the lead in global economic recovery. However, the power of China alone is not enough to support global economic growth.

“It is unrealistic to put hope in China to play the role of bridging the global demand gap,” said Qu Hongbin, chief economist of HSBC China.

Qu said that, as the world’s second largest economy, the greatest possible contribution China can make to the global economy is no other than maintaining its own domestic demand and steady economic growth. This is not only for China’s own benefit, but also provides a “ballast stone” for global economic recovery.

Vice Foreign Minister Cui Tiankai pointed out that China has always maintained a very responsible attitude to the international community, and will earnestly undertake such responsibilities. 

“However, China’s voice in global economic governance and decision-making process is not commensurate with China’s responsibilities,” Cui said.

“Rights and obligations ought to be hank for hank. We have made such big contributions, but the proportion we share in the international financial institutions such as IMF does not fully reflect the economic strength we now have and the contributions we have made.”

“A consensus of all the G20 members is that the existing international financial architecture needs reforming. And the basic starting point is to increase the voice and representativeness of emerging market countries and the vast number of developing countries in the international financial system,” said Xu Hongcai.

Xu said that at present the contradiction converges at the “single large shareholder” phenomenon of the United States and Europe, which should be taken as the juncture for promoting the governance structure reform of IMF. China on the one hand hopes that the United States and Europe can concede part of the share and proportion they take in the international financial system, and on the other hand, that the position of China as a leader in the international financial system should be strengthened.

In addition, Xu said that the SDR (Special Drawing Rights) also needs reforming. The application scope of SDR should be adjusted and expanded to include the currency of the yuan and other emerging countries into the big basket of SDR so that the risk of over-concentration of international reserve current in Euro or U.S. dollars can be mitigated, which should be welcomed by all.

 

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