LOS ANGELES - China is being transformed from a labor-intensive economy to a capital-intensive one, which would benefit the country and the rest of the world, a US expert said.
"It's actually a process that is underway right now," Bernard Baumohl, chief global economist at the Princeton, NJ-based Economic Outlook Group, told Xinhua in a recent interview.
"In other words, it is a mistake for people to believe that all that China produces are cheap consumer products or industrial raw material."
Baumohl said he believes China would achieve its goal to transform its economy, and to that end it will shift the structure of economy and move away from export to more domestic consumption.
"When you combine the rising wages and a rising currency, it can create problems for exports. So it's important that China shifts from a labor-intensive economy to a capital-intensive one," said the expert.
"And China has to shift some of its manufacturing facilities out of the country."
Baumohl said he believes China will continue to play an important role in propelling global economic growth.
According to his estimate, global growth will be about 3.7 percent this year and will increase to 4.2 percent and 4.6 percent in 2011 and 2012, respectively.
Baumohl commended China for successfully handling the global financial crisis.
"China has actually done much better during this global financial crisis and international recession that we saw. While the US and much of the rest of the world had a recession, China was able to still grow at a fairly healthy rate," he said.
One of the reasons for that is "there is not much internal debate like what we often see in the West," he said.
"In China, policies to keep the economy out of trouble get implemented very quickly. This has served China very well because they have been able to avoid recessions and particularly avoid some of the harm and devastation that was caused by the global economic downturn and the financial crisis."
Historically, "Chinese policy makers have successfully steered China away from several global economic storms, such as the Asian financial crisis and the Russian debt default," Baumohl said.
"All of these in many ways hurt some of the major global economies but China has been able to avoid that kind of fate."