Cui tack­les false views of econ­omy

China Daily (Canada) - - TOP NEWS - By CHEN WEIHUA in Wash­ing­ton chen­wei­hua@chi­nadai­

Am­bas­sador to US writes that China is scape­goated by eco­nomic mis­per­cep­tions

Clearly up­set with the doom-and-gloom views in the West about his coun­try’s econ­omy, Cui Tiankai, the Chi­nese am­bas­sador to the US, wrote an op- ed ar­gu­ing that the world’s sec­ond­largest econ­omy is grow­ing stronger while it is com­mit­ted to re­forms.

Not­ing a tur­bu­lent global econ­omy, Cui said China, sadly and for no log­i­cal rea­sons, is of­ten used as a scape­goat for cur­rent global mar­ket fluc­tu­a­tion.

“It is im­per­a­tive that peo­ple are clear about the re­al­ity be­hind the world­wide eco­nomic volatil­ity,” Cui said in the ar­ti­cle ti­tled APros­per­ous China Ben­e­fits the World, posted on The Wall Street Jour­nal web­site Tues­day evening.

Cui said China’s eco­nomic growth re­mains strong, and its con­tri­bu­tion to the world econ­omy is still im­pres­sive. He cited World Bank data that be­tween 2009 and 2014, China’s GDP grew at an av­er­age an­nual rate of 8.7 per­cent, com­pared with the 2 per­cent world av­er­age. Dur­ing the pe­riod, China con­trib­uted 30 per­cent of global eco­nomic growth.

Even in 2015, China’s eco­nomic growth rate of 6.9 per­cent was among the world’s fastest, and China con­trib­uted 25 per­cent to global growth.

Cui at­trib­uted the growth largely to the middle class, the driv­ing force of con­sump­tion in China. Ac­cord­ing to Credit Suisse’s most re­cent Global Wealth Re­port, China’s middle class, (in­di­vid­u­als with wealth be­tween $50,000 and $500,000) now ranks the largest in the world with 109 mil­lion mem­bers, sur­pass­ing the US with 92 mil­lion mem­bers.

Given the stock mar­ket fluc­tu­a­tions in China, Cui ad­mit­ted that there is room for im­prove­ment in mar­ket man­age­ment.

“But China’s real econ­omy in the long term has not been harmed since the stock mar­ket tur­moil be­gan last Au­gust,” he said.

Many econ­o­mists have ar­gued that China’s stock marke t, whose value ac­counts for about 30 per­cent of China’s to­tal GDP, com­pared with 100 per­cent in the US, does not re­ally re­flect the real econ­omy.

Cui called it false that the Chi­nese govern­ment has in­ten­tion­ally de­val­ued the yuan to boost ex­ports.

While the eco­nomic slow­down has con­trib­uted, China’s cur­rency de­pre­ci­a­tion is mainly the re­sult of an ex­change- rate re­form launched last year to fol­low in­ter­na­tional stan­dards and to es­tab­lish a more flex­i­ble sys­tem linked to a bas­ket of cur­ren­cies, thus let­ting mar­kets play the de­ci­sive role. “This has noth­ing to do with boost­ing ex­ports,” Cui said.

Even for the com­modi­ties mar­ket, Cui said there is still sig­nif­i­cant de­mand from Chi­nese con­sumers, cit­ing a still-grow­ing de­mand for grain and oil and a huge de­mand for US beans and cot­ton.

The Chi­nese am­bas­sador be­lieves that struc­tural re­forms will bring a brighter fu­ture to China’s econ­omy and, con­se­quently, greater op­por­tu­nity to the world.

He de­scribed China’s 13th Five-Year Plan (2016-2020) as lay­ing out five clear de­vel­op­ment con­cepts: in­no­va­tion, co­or­di­na­tion, green de­vel­op­ment, open­ing- up and in­clu­sive­ness.

Cui said China’s lead­ers are de­ter­mined to see through struc­tural re­forms.

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