(China Daily)
Updated: 2008-01-25 16:01

The world must find China's blistering economic growth particularly reassuring as a US recession weighs more and more heavily on policymakers and investors around the globe. Expectations are high that strong growth within emerging economies like China will help tide the world economy over as the US comes to terms with its slowdown.

However, after five consecutive years of double-digit growth, the Chinese economy is not likely to further accelerate.

The tightening measures that the government has adopted to cool off the country's economic growth this year may disappoint those who have pinned high hopes on China as a key growth engine to save the world economy from an imminent deceleration. But all China's efforts to balance its economy will prove crucial to its long-term growth as well as to the growth of the global economy.

Only when China has addressed institutional and structural problems like excessive investment and over-dependence on exports will its economy become a source of sustainable growth for the world.

Latest statistics indicate that China's GDP jumped 11.4 percent to 24.7 trillion yuan ($3.4 trillion) last year. This marks the fastest expansion in 13 years. This is a combined result of an investment boom, a record trade surplus and a moderate pickup in consumption.

Fixed-asset investment soared 24.8 percent year-on-year in 2007, 0.9 percentage points higher than that in 2006. Meanwhile, the trade surplus ballooned to $262 billion, up 47.7 percent. And retail sales went up 16.8 percent to 8.9 trillion yuan, or 3.1 percentage points more than in the previous year.

However, the fourth quarter figures offered signs of desirable changes. As tightening measures took effect late last year, the growth of investment and exports had slowed, while retail sales went up 20.2 percent year-on-year in December, the fastest in a decade. In the past quarter, the country's economic growth has become less speedy, but more balanced.

In a year when the world economy is increasingly exposed to the risks of a US recession, it will be even harder for China to carry on the transformation of its growth pattern. A slowdown will exacerbate the difficulties facing many Chinese enterprises, especially those already affected by weakening external demand.

Fortunately, the government has the fiscal means to stimulate the economy if it comes to that. But even emergency measures should not stop or suspend the country's pursuit of balanced growth.