Leaders of the Group of 20 (G20) are arriving on Saturday in the Turkish seaside resort of Antalya for their annual gathering amid foggy prospects of the global economy and calls for bolder actions to jump start the still slack recovery.
China, the world's second largest economy, has also been experiencing a slowdown in growth, and that has stirred speculations that the best days of China's 30-plus-year old economic epic is coming to an end, and may further drag global rehabilitation down. But such worries could prove to be invalid and unnecessary.
PROMISING PROSPECTS
While admitting that the Chinese economy has indeed taken a hit because of a tardy world economic growth and etiolated global trade, observers say the key reason for the downturn of China's growth rate is a product of Beijing's restructuring and reform strategy to ensure sustainable growth in the future. This passing third quarter, China posted a growth rate of 6.9 percent, the slowest since the 1998 financial crisis. Yet considering the size of its economy, that figure does not mean the Chinese economy is losing momentum. China still has a host of favorable conditions to help it tide over the turbulences as it upgrades its growth modes.
Yuksel Gormez, senior economist with Central Bank of Turkey, told Xinhua that the world should read China's economic numbers in a correct way. He said growth in China is continuing in volume terms, but dipping in percentage terms. "When China becomes a 20-trillion dollar economy, even a five-percent growth will create one trillion dollars of net value in one year," he said. "Can you say China is not growing?" Amar Bhattacharya, senior fellow with the Brookings Institute, said what is encouraging is that the world has started to realize that the Chinese economy is "relatively OK," and can and will make a big difference in the world.
OPPORUNITY FOR WORLD
Late October, China unveiled its blueprint for the next five years, the 13th five-year plan, which sets a goal of maintaining a medium-high annual growth rate of 6.5 percent, and doubling its 2010 GDP and per capita income by the year 2020. Highlighting innovation, the proposals, which aim to transform China's growth pattern from an investment, export-led economy to a domestic consumption, services-driven one, would boost demand for greener energy resources, and bring new opportunities to promote growth worldwide.
Ussal Sahbaz, an analyst at the Economic Policy Research Foundation of Turkey, said the more China adopts a growth path based on domestic consumption, the larger opportunities it will create for other emerging economies to export to China and to gain from its new and huge markets. Meanwhile, Beijing's Belt and Road Initiative will also continue to present infrastructure investment and industrial capacity cooperation opportunities for other developing nations, especially those along the ancient Silk Road.
Ussal Sahbaz said China's initiative aims to mobilize funds and know-how to modernize the vast region of Eurasia, which sill needs roads, banking systems, fiber-optic cables, adding that institutions like the Asian Infrastructure Investment Bank (AIIB), which was also proposed by China in a bid to replenish the shortages in global funds for infrastructure construction, are crucial, and should be supported by the international community.
HELP IMPROVE GLOBAL GOVERNACE
Next year, China will take over the G20 presidency, and many expect it to further invigorate efforts in promoting global governance. One key aspect is the reform of the International Monetary Fund (IMF). Right now, the IMF's 2010 quota reform plan remains in limbo because the U.S. Congress refuses to ratify it. In addition, a more urgent problem threatens to endanger global financial stability: By the end of next year, about 380 billion U.S. dollars worth of bilateral loans many countries borrowed from the IMF are beginning to expire. The international community needs to find solutions.
Tristram Sainsbury, a research fellow of G20 studies center at the Lowy Institute for International Policy, suggested that China, as the chair, has to lead this process through G20. If China can shepherd a process to renew these loans, and do so in a way that allows the IMF not to focus on its own governance but on global economic problems, then China will be contributing to improve global governance, Sainsbury said.
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