As impacts of the international financial crisis are lingering, Chinese President Xi Jinping said Sunday on the Group of 20 (G20) summit that targeted medicine for sluggish growth must be prescribed.
In a speech entitled "Innovative Growth That Benefits All," the Chinese leader pointed out that the G20, a main forum for global economic and financial cooperation, should work to maintain a stable economic growth in the short term, while seeking to inject new impetus into the world economy in the long term.
Xi's proposals for boosting global growth through effective measures as well as China's endeavors to deepen reform and build an open economy have also been recognized by overseas experts.
ROOT CAUSE OF WEAK ECONOMIC GROWTH
Themed with "collective action for inclusive and robust growth," the ongoing G20 summit, held in the Turkish resort city of Antalya, is expected to underpin global confidence and ensure strong, sustainable and balanced growth for the world economy.
Why seven years into the crisis, the world economy is still slow in recovery and weak in growth? Xi gave his answer in the speech that the momentum generated by the last round of scientific and industrial revolution is waning and the potential for growth under the traditional economic system and model of development is diminishing.
At the same time, the problem of uneven development is far from being resolved, and the inadequacies of the existing economic governance mechanism and structure have become evident. "These factors have weakened the momentum of global growth and dampened effective demand, which are manifested in sluggish growth," said Xi.
He stressed that the G20 members should not only address the immediate challenge by stabilizing growth, but also tackle the root cause by gathering momentum for long-term development. "The governments of the G20 nations should work together in terms of macro economic policy coordination," said Tristram Sainsbury, a research fellow in the G20 Studies Center at the Lowy Institute. "They need to know that more growth is needed, and more actions are needed," he said.
EFFECTIVE MEASURES TO REVITALIZING GROWTH
The dynamism and creativity unleashed through institutional reform and the new industries and products enabled by the development in science and technology have been essential for the world economy to turn the corner and recover from previous major crises, said Xi. New ideas and new business forms such as Internet+, sharing economy, 3D printing and smart manufacturing are generating enormous business opportunities and demand.
Xi said the G20 members should seize the opportunities, and make innovation-driven development and cultivation of new growth points the new priorities of G20 cooperation. Revitalizing trade and investment and restoring the two engines of the world economy to high-speed operation is another priority for the G20, said Xi.
In 2014, foreign direct investment around the world dropped by 8 percent, which deserves close attention. "We should reject protectionism and uphold and strengthen the multilateral trading regime in order to provide sufficient space for the development of different countries," said Xi.
In the wake of the failed World Trade Organization (WTO) Doha trade negotiations that stumbled because complex issues could not be resolved, nations are now forming regional trade blocks, which are politically charged.
"Regional trade deals are potentially overlapping trade routes, and that leads to trade diversion rather than trade creation," said Sainsbury. Xi said the G20 members should ensure that regional free trade arrangements serve as a useful complement to multilateral trading regime, rather than create new obstacles.
CHINA REMAINS DRIVING FORCE FOR GLOBAL ECONOMY
After 30-plus years of fast growth, China also experiences a slowdown, which has stirred speculations that China's economy will come to a halt and may drag global rehabilitation down.
However, Xi said China has the confidence and ability to sustain a medium-high growth rate and continue to create development opportunities for other countries. The Chinese economy is predicted to grow about 7 percent this year, which will continue to contribute as high as about one third to the global growth, he said.
Yuksel Gormez, a senior economist with Central Bank of Turkey, told Xinhua that the world should read China's economic numbers in a correct way. He said the 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?" Xi admitted that China has come to a crucial point when it must adjust the growth pattern and structure of the Chinese economy.
"This endeavor won't be a smooth sailing. It won't happen overnight," he said, adding that China's resolve to push forward structural reform is rock-firm and its policy to open up further is clear. "The emerging economies may have plateaued a little bit, but that is because the reform is necessary," said Akshay Mathur, an expert on geoeconomics studies at Gateway House (Indian Council on Global Relations).
"China's 'new normal' aims at better quality growth with more consumption, this is a hard work, it takes time," he said. China has adopted a proposal on formulating the 13th Five-Year Plan (2016-2020) on national economic and social development, which aims to build a "moderately prosperous society" and double its 2010 GDP and per capita income of both urban and rural residents by 2020, said Xi. In the next five years, China will adhere to a path of innovative, coordinated, green, open and shared development, and will encourage a system that nurtures innovation, said Xi.
The country will try to realize the synchronous development of the new type of industrialization, IT application, urbanization and agricultural modernization, he added. China, Xi said, will highlight green and low-carbon development, improve its environmental quality, become heavily involved in global economy, and carry out the Belt and Road initiative. All these efforts will inject strong impetus into China's economic growth while unleashing demand for the world economy, said the president.
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