China picks up ba­ton of world growth driver from US

Global Times US Edition - - BIZCOMMENT - By Hu Wei­jia

The Chi­nese edi­tion of the Nikkei Asian Review on Mon­day pub­lished an ar­ti­cle high­light­ing what it calls the first global eco­nomic re­ces­sion in his­tory that orig­i­nated from China. This rep­re­sents the pop­u­lar view that a slow­down in the Chi­nese econ­omy is a big threat to the world econ­omy.

This is just a new vari­a­tion of the “China threat” the­ory, which has long been used by some Western schol­ars to con­tain China.

China’s eco­nomic slow­down is a fact, but the nation is still the largest mar­ket for many well-known com­pa­nies such as US au­tomaker Gen­eral Mo­tors. The rise of “China threat” ar­gu­ments around the world also can be taken as ev­i­dence that the Chi­nese mar­ket is now an im­por­tant fac­tor for transna­tional cor­po­ra­tions and one that can de­ter­mine their destiny.

The Chi­nese econ­omy is changing faster than ex­pected amid the trade war with the US.

The era of cheap la­bor in China is over, so the nation is striv­ing to trans­form it­self from be­ing the world’s fac­tory to an advanced in­dus­tri­al­ized nation. The trade war has ac­cel­er­ated the process as US tar­iffs push some la­bor­in­ten­sive man­u­fac­tur­ers to re­lo­cate pro­duc­tion to South­east Asia.

It is nor­mal to see a re­duc­tion in China’s im­ports of some raw ma­te­ri­als.

Aus­tralia, a ma­jor pro­ducer and ex­porter of bulk com­modi­ties such as iron ore, is likely to be among the first coun­tries to feel the pres­sure, but this is just a nor­mal part of the ad­just­ment of the global in­dus­trial chain.

China is un­der­go­ing a tran­si­tion as do­mes­tic con­sump­tion sur­passes the ex­port-ori­ented sec­tor to be­come the chief driv­ing force of the econ­omy. In­stead of wor­ry­ing about a slow­down in the ex­ports of cer­tain raw ma­te­ri­als to China, for­eign com­pa­nies need to work harder to win China’s mid­dle-class consumers.

Sadly, some well-known Western com­pa­nies are so ar­ro­gant that they have a limited un­der­stand­ing of the Chi­nese mar­ket and consumers, as they move slowly in terms of lo­cal­iza­tion.

Some com­pa­nies even have no un­der­stand­ing of Chi­nese ter­ri­tory and list China’s Tai­wan as a coun­try on their web­sites.

Vice Premier Liu He, who is also the top Chi­nese trade ne­go­tia­tor with the US, said on Mon­day that China has vi­brant mi­cro fundamenta­ls and that the nation’s eco­nomic growth is shift­ing gears. Great ef­forts have been made by China to ad­just its econ­omy amid global un­cer­tainty.

The US has lost the abil­ity to lead global eco­nomic growth. If Western com­pa­nies want to seize op­por­tu­ni­ties in China, they must follow China’s de­vel­op­ment and ad­just. The au­thor is a re­porter with the Global Times. bi­zopin­[email protected] glob­al­times.com.cn

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