Opinion
It will be another golden decade if ...
By Zhu Qiwen (China Daily)
Updated: 2010-03-01 13:29
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Second, China's export engine will keep humming as long as the global trade system is not completely undermined by protectionism.
Though rising protectionism in the West will clog up the wheel of China's export engine, Chinese economists believe that the huge gap of labor costs between China and developed economies as well as the rising productivity of Chinese exporters will help secure domestic companies' share in the international market.
Third, domestic consumption is rising steadily, much to the surprise of both Chinese companies and foreign producers.
Two numbers provide enough evidence: China's imports rocketed by a record 85.5 percent in January, while the Chinese bought 1.66 million cars, more than any month before.
One should certainly not read too much into these monthly figures. But they can help explain why auto sales jumped by over 40 percent to make China the world's largest auto market while refuting the false assumption that Chinese consumers have spent too little. As their incomes increase, consumers may have already grown into a critical source of economic growth more important than it has ever been acknowledged.
In theory, all the elements for another golden decade are thus ready for the Chinese economy.
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A metaphor to illustrate its rapid ascension to economic supremacy might be a high-speed train running at full steam rather than a bicycle that has to go fast to keep its balance.
On the one hand, it highlights the great impact that China's growing economic clout has brought about on the world, be it good or bad. And the challenge for China is whether it can properly adapt to the changing expectations placed upon it by other nations.
But more importantly, the metaphor sheds light on a key challenge China must face in the new decade.
For a high-speed train to travel safely and swiftly, all parts must move in accordance with the locomotive. However, a widening income gap between the rich and the poor as well as between rural and urban areas has emerged, undermining efforts to redesign the country's growth model to a more sustainable trend.
This is the root cause for China's unbalanced growth. How fast can China fix this will largely determine how far its economy can continue to advance in the new decade.
E-mail: zhuqiwen@chinadaily.com.cn
