China's strong economic growth assists world economic recovery
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While steering its economy through the global financial crisis, China had been making important contributions to the recovery of the world economy, experts said on Wednesday.
"The fact that China cast off the economic crisis earlier than other major economies doesn't mean China benefited the most. The world as a whole has benefited no less from China's strong growth during the crisis," said Zhao Jinping, a senior researcher with the Development Research Center of the State Council, or the Cabinet.
Like other major economies, China was also hard hit by the global downturn, suffering job losses and shrinking trade, especially in the second half of 2008, said Zhao.
Because different countries had different economic fundamentals and varied policies to counter the crisis, it was only natural that some countries stepped out of the crisis earlier than others, Zhao said.
In November 2008, China unveiled a four-trillion-yuan (589.67 billion U.S. dollars) stimulus package and shifted the fiscal policy from "prudent" to "proactive" and its monetary policy from "tight" to "moderately loose," becoming one of the first countries in the world to adopt large-scale economic stimulus plans.
"It is the Chinese government's timely and effective policies that have enabled China to shirk the crisis earlier than others," Zhao said.
China's gross domestic product (GDP) grew 8.7 percent in 2009, exceeding the official target of 8 percent. The growth accelerated to 11.9 percent during the first quarter this year, according to the national statistics authorities.
While securing its own growth, China had also injected energy into the world economy through its stimulus measures, providing market for exports from its trading partners and boosting confidence in recovery, Zhao said.
Robert Lawrence Kuhn, an international investment banker and the author of the book "How China's Leaders Think", said China had been and is now helping drive the world to recovery with its stimulus package and measures seeking to boost domestic consumption.
"At the beginning of the crisis, many people, including many in China, feared that China would suffer grievously, because so many jobs were dependent on exports," said Kuhn.
"Everyone now recognizes that China's rapid response has not only kept it stable and growing, but also helped prevent the world from falling into an even deeper recession," he said.
First, most emerging economies benefited from China's stable growth during the crisis, said Yao Shujie, a professor of economics at the University of Nottingham.
"Maintaining the fast growth of China's economy at 8.7 percent in 2009 implies that China imported large amounts of raw materials and intermediate industrial products, helping countries export these products to recover from the crisis quickly, such as Brazil, Australia, Russia and many countries in Africa, Asia and Latin America," said Yao, who is also head of the School of Contemporary Chinese Studies at the UK-based university.
Furthermore, China's high level of imports from industrialized countries since the crisis broke out also helped them stabilize their domestic economies, Yao said.
Echoing Yao, Zhao Jinping said that developed countries had resorted to export growth to achieve economic recovery during the financial crisis, especially since the beginning of this year, and China had been serving as a major market for them.
Data provided by the Development Research Center of the State Council showed that exports from the United States to China grew by 42 percent from January to April this year, while imports received from China increased 13 percent. China-Japan trade follows similar patterns over the same period, said Zhao.
As a whole, China's import increased by 57.5 percent from January to May this year, a growing pace much faster than the 33.2 percent increase of its export to other countries, resulting in its trade surplus narrowed by 59.9 percent, national statistics authorities said.
Zhao interpreted this as a sign, to some extent, that China was contributing more to the world economy than it benefited from it.
In addition, China's steady and fast growth also provides strong confidence to the world economy. In a crisis situation, confidence is the most important factor for economic stability and recovery, as agreed by economists and politicians around the world.
While most of the economies elsewhere were stagnating or decreasing, China had secured fast growth during the crisis, and continually sent "a rare package of good news that served to give hope and encouragement across the globe at a time when all seemed doom and gloom," Kuhn said.
