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Domestic economic transition to rebalance global economy

Author  :  JIANG HONG     Source  :    Chinese Social Sciences Today     2017-04-06

LONDON—China’s economic growth and transformation could help to rebalance the world economy as the nation makes its economy more sustainable and inclusive, said British experts in reference to the priorities highlighted in this year’s Two Sessions.

The National People’s Congress and the Chinese People’s Political Consultative Conference, collectively known as the Two Sessions, are gaining increasing attention from the international community.

The most striking thing about the meetings this year is that they show how China’s domestic priorities are now truly global ones, said Kerry Brown, director of the Lau China Institute at King’s College. In a world of increasing uncertainty, China’s Two Sessions delivers a message that the nation knows where it is heading and is making steady reform to realize its economic targets, he said.

Britain’s former Commercial Secretary to the Treasury Jim O’Neill said two things are important for China in the mid to long term: integrating migrant workers so that they obtain full urban rights in cities and further improving the environment.

China needs to balance economic growth with social transformation and create new opportunities and platforms for economic growth, providing the innovation needed to facilitate smart growth, said Neil Renwick, a professor from the Contemporary China Applied Research group at Coventry University.

China is now entering another key stage as it transitions from an economy driven by investment and export to one that relies on domestic consumption.

The transformation is slowly happening and is essential to the world, O’Neill said. A more consumptiondriven Chinese economy is not only good for individual Chinese consumers but also entails a shift in the nation’s engagement in global trade, he said. The winners overseas will probably be those countries with more value-added exports as well as more-advanced manufacturers and service providers, he added.

Despite the slowdown, Renwick said he is still optimistic about China’s economy. These challenges are well understood by Chinese leaders, who are realistic about economic growth and taking serious measures, he said.

Recognizing the challenges and processes of globalization, and understanding the need to cooperate and collaborate, the Chinese government has made great endeavors, such as the “Belt and Road” initiative, and the creation of the Asian Infrastructure Investment Bank (AIIB). The Chinese economy is having a direct influence on the way the international system is being run, Renwick said.

If China’s transformation continues unabated, it will be good for the world, and help to rebalance the global economy in a way that will be comforting in the aftermath of the 2008 crisis, O’Neill said. China has become the biggest importer for more than 70 economies in the world. If China consumes and imports more consumer goods, then that will change the Western populist view, he said.

Like other economies, China was vulnerable to turbulence in the international financial system, so the Chinese government is trying to adjust and restructure the economy. In the mid to long term, it is going to lay a more sustainable basis for economic growth, which will therefore help to solidify and provide a firmer foundation for long-term economic growth at the global level, Renwick said.

Editor: Yu Hui

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