China's economic growth bound to boost world trade: Cypriot economist

2017-05-03 09:36

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China's galloping economic growth over the past 30 years is bound to boost world trade in the future as the country's growing middle class will tend to buy more imported goods, Cypriot economist and politician Marios Mavrides told Xinhua in a recent interview.

"I believe that in the coming years the trade between China and the West will grow more and will become a two-way process, as a middle class is being established in China that will tend to buy more consumer goods," Mavrides said.

Mavrides teaches economics at the European University in Nicosia and is also a parliamentary deputy with the ruling party of the eastern Mediterranean island.

Mavrides said that after many years of high growth rates, prospects for the Chinese economy seemed to remain very good. But he noted that China had sold low-cost goods to the world to fund its economic growth, but this was bound to change in the future.

He explained that China will stop being only an exporting country and instead import large quantities of goods and services as its huge population becomes able to afford more.

"It is in the interest of both sides to continue free trade and exchange of services between them," Mavrides added.

He said that this could become possible as global management dexterity grows and adapts to interaction. China may not have developed the kind of enterprise management that is characteristic of western-style businesses, but it has a lot to teach other countries in its management style marked by improvisation, flexibility and speed.

This is quite different from the tight structures of the West that prevent new opportunities and thus achieving quick expansion.

Mavrides said that global management development was also a two-way process.

"Innovation development and coordination are important elements of growth, but these cannot come through state agreements. These characteristics are developed by the forces of the free market," Mavrides noted.

"In other words, free trade and globalization will find their way in an environment of political, economic, and social stability," he added.

Mavrides said that globalization had succeeded in connecting the countries between them, as involvement in one country affected other countries. But he acknowledged that problems such as the refugee crisis, nationalism, and internal strife affected almost every country in the world as well as the process of globalization.

He said that even though some of the problems were interconnected, each problem had its own root.

Internal strife, Mavrides says, leads to the refugee problem and this, in turn, leads to nationalism in countries which receive refugees. Nationalism is a source of protectionism, he said.

"I believe that free trade has been a very positive development, which, however, requires economic and social stability...The best way out would be finding a solution to the problems the world is faced with and to leave trade to develop freely. Then, globalization will again find its way," said Mavrides.

Mavrides said that in this respect, reviving the Silk Road, which he described as an ambitious and daring plan, was a feasible project. But he added a caution that risk exists in the implementation.

"This is because the cost is high and the benefits will come on the way, provided that no problems, mostly geopolitical, come in the way. But should it become a reality, it will lead to an important joining of China with Europe and will create more cooperation between the two sides with mutual benefits," said Mavrides.

He said reviving the ancient East-West trade route would be a source of growth as it would lead to accessing the huge Chinese market that would boost the world economy.

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