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China has major role in world economic recovery

Updated: 2012-09-10 07:41
By Li Jiabao in Xiamen, Fujian ( China Daily)

China will lead the global economic recovery with its relatively fast GDP growth driven by stimulus plans and expanding domestic demand, the United Nations Conference on Trade and Development said on Sunday.

China has major role in world economic recovery

Xing Li, assistant vice-president of client markets at Swiss Reinsurance Company Ltd’s Beijing branch, delivers a speech at the news conference on the Trade and Development Report 2012 in Xiamen, Fujian province, on Sunday.ZOU ZHONGPIN / CHINA DAILY

"Though China's economy is not expanding as fast as before, its GDP accounts for a growing share of the world economy," said Li Yuefen, head of the Debt and Development Finance Branch of the UNCTAD.

"China's domestic consumption surged significantly and has become the new driver for further growth. I agree that China is the locomotive of the world economic recovery," Li said.

Li was speaking at a news conference on the Trade and Development Report 2012.

The report, featuring policies for inclusive and balanced growth, will be published on Sept 13.

Xing Li, assistant vice-president of client markets at Swiss Reinsurance Company Ltd's Beijing branch, agreed.

"China's GDP growth kept a fast pace in recent years and grew 7.6 percent year-on-year in the second quarter of this year. Though it is the slowest growth in more than three years, it still outperformed developed economies and is a highlight among emerging economies," Xing said.

"Emerging markets, including China and India, will play a very significant role in boosting the world economic recovery," she said.

Xing said the world economy is recovering, but at a slower pace than expected.

"The US will avoid recession again; European Union leaders agree Spain and Italy have done enough to repair their struggling economies and will offer them aid."

President Hu Jintao said at the APEC Summit held at the Russian port of Vladivostok, that China will continue to pursue a proactive fiscal approach and a prudent monetary policy, and maintain balance by maintaining steady and healthy growth, adjusting the economic structure and managing inflation.

China's moves to boost domestic demand and stabilize economic growth will create great business opportunities and jobs for both the Asia-Pacific and the world, and contribute to global growth, according to Hu.

Dusan Zivkovic, economic affairs officer of the Debt and Development Finance Branch of the UNCTAD, said China is changing its growth model with strong domestic demand and great reserves.

"At this stage China already has strong domestic demand, and is more insulated from the global shock than before, although the global economic recession has slowed China's growth.

"China recently put forward the stimulus plans of new infrastructure projects, which play a very big and positive role in boosting its economic growth and investment confidence. The stimulus comes out carefully following the global economic situation and in a very constructive manner."

In September, the National Development and Reform Commission, China's top economic planning agency, approved dozens of urban projects for highways, ports, railways, sewage networks and waste treatment plants across the country that could be worth more than 800 billion yuan ($126.98 billion).

Zivkovic did not think the stimulus will lead to an overheating of China's economy because it comes in multiple phases and is smaller than the previous stimulus that followed the financial crisis in 2008.

Petko Draganov, deputy secretary-general of the UNCTAD, also saw "very good possibilities" for China to breathe life into the world economy.

"In addition to strong domestic demand spurring further economic growth, China maintains its attractiveness to foreign direct investment. The slight decline of FDI in China is mostly because of the world economic stagnation and potential investors hold back cash over concerns of uncertainty."

Vice-Minister of Commerce Gao Hucheng said on Saturday that China will keep guiding FDI into China's modernizing agriculture and services sectors as well as emerging industries while encouraging domestic manufacturers to go abroad for technology research, manufacturing and sale networks.

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