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China's growth model reforms to spur global economy

Xinhua | Updated: 2016-12-14 16:47

BEIJING - China will still be a growth engine of a global economy beset by instability, thanks to efforts to shift its growth model among other stimulus endeavors, scholars and business leaders from around the world have said.

This kind of optimism is running high prior to China's annual Central Economic Work Conference, an important event scheduled at the end of the year to map out economic priorities and reform plans for the upcoming year.

Reforms on growth model

As China's economy slows on sluggish exports, tepid investment and an industrial glut, Beijing has been trying to foster new growth drivers by encouraging innovation and structural upgrading.

"It is no wonder an exciting story," said Paul Sheard, executive vice-president and chief economist of S&P Global.

Being one of the largest economies in the world undergoing great economic change, China is unique because of its efforts to alter its political, economic and social system, he said.

The fact that China has 35-year track record of near double-digit growth demonstrates the country's potential, Sheard said.

Innovation has been the backbone of China's reform endeavors, scholars observed, which features high-tech industries, Internet-based businesses, online retail, as well as new products and services.

Matthew Nimitz, advisory director with General Atlantic LLC, said Chinese companies are becoming more competitive over time.

"That phenomenon demonstrates their creativity," said Matthew.

" I ... pay a lot of attention to Chinese internet and technology companies," said Dan Stein, senior vice president of CBI Bank & Trust. "I pay a lot attention to Alibaba, Baidu, Wechat, because these companies are at the forefront."

E-commerce is no doubt at the forefront of change in China, observers said, noting that the growth of e-commerce has been astronomical in terms of speed, velocity and scale.

Paul Greenberg, executive chairman of Australia's National Online Retailers Association, said with China's population of more than one billion, "there really is the opportunity to nail it" for companies.

Based on these trends, it is widely expected that the Chinese economy will register annual growth of around 6.7 percent, within the government's target range of 6.5 to 7 percent set at the beginning of the year.

Engine of global growth

The global economy over the past year has seen many a disruption and challenge to perceived conventional wisdom, with fallouts from the Brexit vote and Donald Trump's victory in US presidential elections still unfolding.

"Another Great Depression was avoided, but not the Great Recession, which has left scars that today's 'New Mediocre,' as coined by the International Monetary Fund, cannot erase," according to the Union Bancaire Privee Investment Outlook 2017.

However, the report predicted that the outlook for next year looks brighter, saying "this recovery promises to be driven by brisker activity in emerging markets"

"China ... will continue to be a growth engine for emerging countries. China's growth rate may rise back thanks to the stimulus measures applied in 2016, and also as a result of the reforms to shift its growth model from being centered on exports and manufacturing to running on consumer and infrastructure spending," it said.

"I think the Chinese economy impacts pretty much every corner of the world," said Stein from CBI Bank & Trust.

Vladimir Shtol, professor at the Russian Presidential Academy of National Economy and Public Administration said China is consistent in implementing its policies and achieving its goals without excessive haste.

"I believe that the Chinese initiates have bright prospects," he said.

China has already announced several ambitious projects including the Belt and Road Initiative with promising development in the near future, he noted.

Paul Greenberg, the NORA executive chairman, called on his company to get involved in China's fast expanding "New Economy," including e-commerce.

"I think in pure unbridled volume China are leading the pack (e-commerce), and in terms of potential, no doubt they'll continue to lead the pack," he said.

"From a NORA perspective I've seen the opportunity with the T-Mall brand," he said, referring to one of Alibaba's online retailers. "So whether it be RM Williams or Blackmores, you know, how do you get those brands out to the broader market place, it looks like we've found our natural home on T-Mall," he said.

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