Opinion / Op-Ed Contributors

Economy must adapt to changes

By Pei Changhong (China Daily) Updated: 2013-01-07 07:42

The quantitative easing measures of the United States, the European Union and Japan can improve expectations for the global recovery and cushion the eurozone debt crisis' impact on the global economy. But these measures will not change the weak growth of the global economy. The International Monetary Fund's predicts that global economic growth will be a mere 3.6 percent in 2013.

Despite the improvement in the real estate market in the United States and the increase in the US government's expenditure, the US' agriculture, exports and investment in non-private real estate are still far from being healthy.

The eurozone is still struggling painfully with its debt crisis. The IMF predicts that the eurozone's local gross value of production will only grow by 0.2 percent in 2013. Meanwhile, economic growth in Japan and the emerging economies is slowing remarkably against the gloomy global backdrop.

The World Trade Organization has lowered its prediction for the growth in world trade in 2013 from 5.6 percent to 4.5 percent.

The deceleration in the growth of world trade has also reduced China's exports by a large margin. China's international trade growth from January to November in 2012 was only 5.8 percent.

At the same time, changes in international capital flows have affected China's usage of foreign capital. Since the second half of 2012, foreign capital has started moving out of emerging economies. According to the World Bank, foreign capital flowing into developing countries and emerging economies declined by 44 percent in the first half of 2012. Although the foreign capital flowing into China is still more than the foreign capital flowing out, foreign direct investment in China has dropped remarkably.

Yet, there are some positive signs that the year ahead will be better than last year.

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