IMD study: China leads global economy
( 2003-11-14 10:09) (Business Weekly)
China's fast economic growth shows no sign of easing and the global economy appears to be recovering, indicates a recently released study.
The study, conducted and released earlier this year by Switzerland-based International Institute for Management Development (IMD), one of the world's best-known business schools, indicates China, due to its fast GDP (gross domestic product) growth, has driven a growth engine for the global economy over the past 10 years.
China's GDP increased 8 per cent last year. During this year's first nine months, the growth rate was 8.5 per cent.
East China's Zhejiang Province was ranked 14th, in terms of comprehensive competitiveness, among the 30 economies, with more than 20 million people, surveyed by IMD.
Zhejiang's economic growth rate last year was 12.3 per cent.
That is a pretty good start, IMD President Peter Lorange said last month during his visit to Shanghai.
IMD made two adjustments to last year's survey.
First, it selected, for the first time, eight cities and provinces, including Zhejiang, as equal economic competitors. Then, IMD divided the competitors into two groups, based on their populations.
The extraordinary, 8-per-cent growth rate, combined with the fact China is fast becoming the world's manufacturing centre, elevated China to the top of IMD's list.
In the United States, meanwhile, interest rate cuts and a rebound in consumer confidence helped revive the economy, but strong economic growth is still a long way off, IMD said.
Many European Union nations are battling deficits and undergoing government restructuring.
Things seem better in Asia. Economies have picked up, despite the outbreak of severe acute respiratory syndrome, which enhanced risks and unpredictability.
Three factors support China's strong global competitiveness:
Strong economic power. IMD's report ranked China as the world's 12th strongest economy this year, backed up by fast growth of overall economic volume.
Last year, China's GDP exceeded 10 trillion yuan (US$1.21 trillion). It was on the world's top-seven list, in terms of total volume of consumer goods, investments, savings and imports and exports.
China attracted US$44 billion in foreign direct investment (FDI) in 2001, and another US$52.7 billion last year. To date, it has accumulated US$395.19 billion in FDI, fourth highest in the world.
China uses one-fourth of the world's steel products.
It provides favourable policies for economic development, especially in the eastern coastal areas, with a huge labour market of 737 million people.
The Chinese Government is making greater efforts to quadruple its GDP, to US$4 trillion, by 2020.
Promoted globalization. On one of IMD's list, which compares the extent of globalization, China moved up two notches in the ranking.
Among the 20 indicators selected by IMD, to best identify China's international competitiveness, two more elements about globalization were added. IMD also listed "national protectionism" as one of China's advantages.
Such factors reveal China has opened wider, and in a more efficient way, since it joined the World Trade Organization in 2001.
Achievements in the IT (information technology) sector. Although China's competitiveness, in terms of infrastructure, slipped in this year's IMD study, the nation became a stronger competitor in technical infrastructure construction.
The rate of computer application increased 0.7 per cent, to remain No 5 in the world.
Investments in telecommunications accounted for 0.4 per cent more of GDP, good for No 2 in the world.
Increased investments promoted the development of technical infrastructure and other relevant industries, which helped China narrow the gap, in information security, with developed countries.
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