Chi­nese econ­omy blessed with huge stay­ing power


China Daily (Canada) - - LIFE -

China has is­sued its 13th FiveYear Plan (2016-20) at a time when the world is wor­ried about its eco­nomic slow­down. Such wor­ries are un­der­stand­able be­cause China is one of the most im­por­tant en­gines of global growth. If the Chi­nese econ­omy slows down fur­ther, economies that heav­ily rely on it for their growth will suf­fer “col­lat­eral dam­age”.

But the 13th Five-Year Plan sug­gests that its econ­omy still has much room for growth and will con­tinue con­tribut­ing to global growth. Peo­ple need to view China’s con­tri­bu­tion dif­fer­ently, though.

The plan sent a mes­sage to the world that the coun­try will main­tain a medium-to-high growth rate, set­ting 6.5 per­cent as the bot­tom line for an­nual growth. This should brighten the growth prospects of many in­dus­tries in China and of­fer more op­por­tu­ni­ties for for­eign en­ter­prises. For ex­am­ple, the growth of the ser­vice sec­tor and de­vel­op­ment of new-type in­dus­tries both are the re­sult of China’s eco­nomic tran­si­tion and the foun­da­tion of fu­ture growth.

In fact, for­eign en­ter­prises have al­ready in­creased their in­vest­ments in China, which will help pro­pel the coun­try’s eco­nomic growth and of­fer many ben­e­fits to multi­na­tional com­pa­nies.

By deep­en­ing re­form and open­ing-up, China will make it eas­ier for for­eign com­pa­nies to in­vest in the Chi­nese mar­ket. And by making fi­nan­cial sec­tor an in­te­gral part of the ser­vice in­dus­try, China will at­tract more for­eign in­vest­ment which will earn bet­ter re­turns.

Also, since its eco­nomic growth will rely more on in­no­va­tion, tech­no­log­i­cal in­no­va­tion in par­tic­u­lar, China will not only of­fer de­vel­op­ment op­por­tu­ni­ties to Chi­nese high-tech en­ter­prises but also at­tract some for­eign high-tech in­no­va­tive en­ter­prises.

Be­sides, it has be­come dif­fi­cult for many in­no­va­tive minds to find op­por­tu­ni­ties in de­vel­oped economies for new prod­ucts, be­cause large multi­na­tion­als con­trol the tech­nolo­gies and are un­will­ing to let them en­ter the mar­ket for fear of com­pe­ti­tion with the ex­ist­ing tech­nolo­gies. Peo­ple who be­lieve this to be an un­fair prac­tice and want such prod­ucts to hit the mar­ket will be at­tracted by China’s huge mar­ket to re­al­ize their dreams. And they will be pre­cious hu­man re­sources for China to de­velop an in­no­va­tive econ­omy.

China’s over­seas in­vest­ment has grown sharply in re­cent years, suggest­ing there is huge de­mand in China for in­ter­na­tional in­dus­trial co­op­er­a­tion. China’s Silk Road Eco­nomic Belt and 21st Cen­tu­ryMar­itime Silk Road pro­pos­als are wel­comed by the economies along the two routes. And China’s over­seas in­vest­ment and for­eign trade have in­creased with the im­ple­men­ta­tion of the Belt and Road Ini­tia­tive.

Al­though its eco­nomic growth is de­clin­ing, China is still making the largest con­tri­bu­tion— ex­pected to be 30 per­cent this year— to global growth. China is still the world’s largest im­porter of re­sources and en­ergy.

China has set up in­dus­trial parks in many economies, which have helped their in­dus­tri­al­iza­tion process. Th­ese economies could soon sup­ply more low­priced prod­ucts to the world mar­ket and thus off­set the im­pact of the huge liq­uid­ity re­leased by the cen­tral banks of de­vel­oped coun­tries, re­duce in­fla­tion rates across the world and help boost global growth.

The au­thor is deputy di­rec­tor of the Re­search In­sti­tute ofWorld De­vel­op­ment, China De­vel­op­ment Re­search Cen­ter. Cour­tesy: chin­aus­fo­

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