BIZCHINA / Top Biz News

China 'has to play bigger role'
By Wang Zhuoqiong and Zheng Lifei (China Daily)
Updated: 2006-05-23 08:55

It is time for China to take on greater responsibility in the global economy now that it is heading to a more optimistic future, a senior editor of the London-based Financial Times said in Beijing yesterday.

Apart from geopolitics, China has to play a bigger role, particularly in strengthening the WTO global trade system, in seeking balance of trade, and in saving energy, said Martin Wolf, associate editor and chief economics commentator of FT.

To promote a liberal trading environment where China is one of the  important beneficiaries, the country needs to try and ensure that the Doha Round (of global trade talks) is completed successfully,  Wolf, who is attending a high level economic conference in the capital, told China Daily in an interview.

"China is going to play the role the EU and the US had played in the past in maintaining an open trading system," Wolf said on his 10th visit to the country since 1993. "Completion of the Doha Round is one aspect of that."

Wolf, author of "Why Globalization Works," published in 2004, said he believes China's current trade surplus is not sustainable; and the country must find a way to grow without involving ever-rising current account surpluses.

A balanced growth structure means less growth in exports and more consumer spending at home, the economist pointed out, adding that the Chinese Government is fully equipped to spend more in such areas as education and health.

A nationwide "safety net" for the public including a credible pension system, which makes people feel more secure, would encourage more consumption, Wolf said.

One of the reasons people are saving so much is because they feel financially insecure and are therefore obliged to rely on their own savings in old age, he noted.
Asked how the overheating property market could be cooled down, Wolf said it is a normal phenomenon; and mobility of residents to other places in the country would serve as one solution.

"The more expensive a city becomes, the greater the wages will have to be, therefore the greater incentive for business to move elsewhere," Wolf said.

The economist also called for a more clear-cut and effectively-implemented Chinese energy policy  as the world becomes less energy intensive in its production.
Unavoidably, China is moving into a phase of high energy usage; and absolute energy use is on the rise. But "to be compatible with global supply," Wolf said, "China has to develop the technologies and create incentives to ensure that energy is used as efficiently as possible."

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