Make me your Homepage
left corner left corner
China Daily Website

Nation must seize fresh opportunities

Updated: 2013-11-20 13:18
By Li Yang ( China Daily)

The inevitable recovery of developed economies creates new opportunities and challenges for China to deepen its domestic reforms, experts said at a forum held on Tuesday in Beijing.

The event was organized by the newly established Research Center of International Affairs and Chinese Diplomacy, which is affiliated with the Chinese Academy of Governance.

The subject of the global economic situation quickly evolved into a heated discussion on the relations between the world economy and China's reforms among economists and researchers from several Beijing-based think tanks.

The reform plan unveiled by the just-concluded Third Plenum of the 18th Central Committee of the Communist Party of China was the starting point for most discussions.

Unemployment, debt and fiscal issues and the political polarization in developed economies are lowering their decision-making efficiency, said Chen Fengying, a professor of economics at the China Institutes of Contemporary International Relations.

"In contrast, it's natural that the ambitious reform plan sketched out by the Party's new leadership, which targets breakthrough reforms of 60 issues in 16 fields, consolidates the world's confidence in the Chinese economy," Chen said.

But potential risks for some emerging economies and developing countries do exist, as they further distort their economic structures while dealing with the global crisis. "So long as China can avoid a crisis through successful restructuring, as Chinese leaders vowed in their new reform plan, the chances of seeing widespread crises in emerging markets are small," Chen said.

Quantitative easing programs in developed economies will gradually end after 2014 and will foster big changes in monetary policies around 2015, a time when emerging economies and developing countries might see new crises.

In the past five years, developed economies released $5 trillion via quantitative easing programs, among which $4 trillion went to emerging economies and developing countries. The $4 trillion will go back to the developed economies gradually over the next five years."In the past several months, after only about $80 billion was withdrawn from emerging economies and developing countries, crises have started looming in these countries and regions, such as Indonesia and Turkey," said Chen.

Financing costs will also grow in the world, posing another challenge for emerging economies and developing countries.

Eight percent of foreign exchange reserves are in emerging markets, while 80 percent of national debt is in developed countries, leaving the former ample space to manage potential risks and crisis.

Previous Page 1 2 Next Page