Time to shift focus to multi-sector growth

Before the flame of the Olympic torch was extinguished, debates on the outlook of China's economy had already taken over the heat. Questions were raised as to the sustainability of China's post-Olympic economy. Is it likely to experience a sort of downturn?

The concern over China's possible slowdown is now even more pronounced as the financial tsunami hits the US and Europe, with its shock waves starting to pound the shores of the developing countries. The big question is whether China can stand rock firm amidst the financial and consequently economic crisis on a global scale. What role is China supposed to play in the international rescue team, or just to stay afloat? As is obvious, no economy is immune to the contagion in the context of globalization.

One observation is that China's crucial role should be to keep its own economy robust. For that to happen, China needs to stimulate its domestic demand, through continued investment in infrastructure for that matter. The financing for Olympic Games-related fixed assets is believed to have fuelled the economy, and it stands to logic that spending on infrastructure should not relax in the post-Games period. In fact, the Olympic Games was not what pivoted the motors of China's economy. While its impact cannot be denied, it has been very much localized in Beijing and, to a much lesser degree, in some other selected places. Beijing accounts for 3.6 percent of the national economy. The total resources for the stadiums and other sports facilities disbursed over the last four years were in the order of about 300 billion yuan, or an average 0.55-1.06 percent of the entire fixed assets investment. China's spending on the Games is not a big-ticket project any more than a mere swipe of credit card for some electronic gadgets is an extravaganza for a middle-income family in Beijing.