Mu­tual re­spect key to greater co­op­er­a­tion

Eco­nomic fu­ture bright

China Daily (Canada) - - TORONTO -

Af­ter the Pur­chaseMan­ager In­dex, seen as a barom­e­ter of the econ­omy, fell to 47 in Septem­ber for the first time this year and other dis­ap­point­ing data, aroused wide­spread spec­u­la­tion about a “hard land­ing” for China’s econ­omy, many wor­ried that China’s slow­down might have a neg­a­tive ef­fect world­wide.

But Pres­i­dent Xi Jin­ping eased the world’s con­cerns about China’s econ­omy dur­ing hisUS visit, em­pha­siz­ing China is un­der­go­ing eco­nomic restruc­tur­ing and trans­for­ma­tion, which might be a painful process but prom­ises a brighter fu­ture.

China’s rel­a­tively lower GDP growth rate com­pared with the past high-speed years, comes at a time when global eco­nomic growth has slowed and is in ac­cor­dance with the global eco­nomic cy­cle.

More­over, many tech­no­log­i­cal break­throughs have been achieved that will boost qual­ity growth with in­no­va­tion. In 2014, the State In­tel­lec­tual Of­fice ac­cepted 928,000 patent ap­pli­ca­tions, 12.5 per­cent higher than the pre­vi­ous year. In fact, the num­ber of Chi­nese patents has been the most in the world for four suc­ces­sive years, im­ply­ing a new­cy­cle of pros­per­ity.

The worry about China’s mon­e­tary poli­cies hav­ing a neg­a­tive ef­fect is even more un­nec­es­sary. The US Fed­eral Re­serve is glob­ally in­flu­en­tial be­cause 60 per­cent of US dol­lars cir­cu­late over­seas; by in­creas­ing or cut­ting in­ter­est rates, the Fed­eral Re­serve can easily in­ject in­fla­tion or de­fla­tion into emerg­ing economies. China is pur­su­ing the in­ter­na­tion­al­iza­tion of the ren­minbi, but its cur­rency is not so in­flu­en­tial.

Dong Xiao­jun is a pro­fes­sor on fi­nan­cial strat­egy at the Cen­tral Party School.

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