China's development offers opportunities for world economy

Updated: 2011-01-27 14:42
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BEIJING -- Tough talk about an undervalued yuan giving Chinese goods unfair trade advantages at the cost of American jobs shows signs of easing in the United States after President Barack Obama said last week that half a million US jobs are created each year by exports to China.

This year, 3,000 college students in California will each receive $1,000 from Alibaba Group, China's largest e-commerce company, to assist them in operating online shops and logistics services on Alibaba's subsidiary websites.

According to Alibaba executives, the new initiative will help to create up to 100,000 jobs in the United States in the next two to three years.

For more than a decade, China has been touted as an economic powerhouse, yet the country's export-led growth model proved unsustainable when outside demand slumped in the global economic crisis.

Meanwhile, China's $2.85 trillion of foreign exchange reserves accumulated from decades of trade surpluses has contributed to worsening domestic inflation and risks contracting in value with a strengthening yuan.

Having been the world's largest exporter, China has also looked to become a major importer, investor and creator of employment.

Leap-frogging growth

According to the ruling party's proposal on formulating the country's 12th Five-Year Plan (2011-2015), the country shall attach equal importance to promoting exports and imports. Both inbound investment and outbound investment are encouraged.

During Chinese President Hu Jintao's state visit to America last week, China and the United States signed tens of billions US dollars worth of trade agreements. AFP on January 19 cited an unnamed official with the Obama administration saying the deals would generate 235,000 US jobs.

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The annual US exports to China in goods and services supported more than half a million US jobs, Obama said in talks with Hu.

Chinese Commerce Minister Chen Deming said the staggering sum of the contracts underscores the significance of the Sino-US trade ties.

He said that during Hu's visit, the two sides also signed $5.1 billion of investment deals, including Chinese investment of $3.24 billion in the United States.

Under a memorandum of understanding signed during the visit, appliance maker Haier and Honeywell will jointly develop air conditioners, refrigerators and solar-powered water heater technologies based on Honeywell's energy-efficient refrigerants and blowing agents.

"This new round of US-China commercial cooperation will open tremendous opportunities for companies like us to leverage our global resources and our established China operations to leapfrog with China's fast-growing economy," said Shane Tedjarati, president of Honeywell China and India.

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