China's emergence as the prime engine of global growth seems
natural. As the world's fourth largest economy, China has not only
witnessed four years of double-digit growth as of 2006, but is also
positioned to surge more than 11 percent this year.
However, it is still amazing that a developing country like
China can contribute so greatly to world growth.
The International Monetary Fund (IMF) pointed out in a report
that China is now the single most important contributor to world
growth, in terms of both market and purchasing-power-parity
exchange rates.
For years China has ranked among the major growth engines in the
world economy. Three decades of rapid economic growth has increased
tremendously China's economic strength while turning it into a
driving force in the world economy.
Nowadays, as the global economy slows due to the recent
financial turmoil triggered by US sub-prime mortgage difficulties,
China stands out as the new leading growth engine.
Since it is more than likely that the Chinese economy will
remain strong in the foreseeable future, the world may even count
on China and other booming emerging markets to weather a possible
slowdown of the US economy, the world's largest.
In this sense, China's robust economic growth is a blessing for
global economic stability.
Chinese policymakers should certainly take credit for their
careful macroeconomic management in recent years.
But to make the Chinese economy a long-term and reliable source
of world growth, Chinese authorities should increase efforts to
rebalance the country's growth in favor of consumption.
The country has so far relied heavily on investment and exports
for economic growth.
China's trade surplus hit US$185.65 billion in the first nine
months of this year, surpassing the full-year figure for 2006. The
ballooning trade surplus significantly inflated the country's
foreign exchange reserves, adding to the difficulties of reining in
excess liquidity. Moreover, it also exacerbated the country's
external imbalance.
The pace of China's growth is important to the world's growth.
But in the long run, it is the way China grows that will ultimately
define its economic strength and contribution to the world
economy.
(China Daily October 20, 2007)