Golden years may await Chinese manufacturing
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HQ: What role can China play in the global economic recovery?
Luo: BRIC countries have not been significantly impacted by the economic crisis and by and large they have even quickened their pace. This is because of BRIC countries' reliance on the real economy. Their steady flow of foreign reserve deriving from export advantages bolsters their economies as well as their confidence.
BRIC countries embody a circle of emerging economies. They have reasons to remain optimistic, since their labor advantages will remain and they will not suffer the brunt that Western countries have suffered, such as the excessive financialization that resulted in the credit crunch.
HQ:What are the prospects of Chinese manufacturing in the next decade? Can you comment on its transformation?
Luo: China' manufacturing has found a great deal of opportunities. This depends on many factors.
For example, China's political stability and the professionalization of officials who draft economic policies have created a cozy environment for market economy.
In retrospect people find that most of the policies that Chinese government made rest on people's long-term interests rather than short-term political popularity. This is a key fact that has facilitated China's economic miracle.
China also has steady foreign reserves which help cushion the shocks from outside and inside. In comparison to Western countries' Keynesian policy to fiscally and monetarily offset the shocks, this pattern results in no government debt that threatens long-term growth. Large amounts of foreign reserves also facilitate Chinese enterprises' foreign investments.
The great potential of Chinese manufacturing is the exact reason for China's sustainable growth. Although China does face plenty of challenges, including the wealth gap and the buildup of a basic social welfare system that covers most of its citizens equally, the opportunities vastly outweigh the challenges and risks.
The economic transformation from polluting industries to high-tech and clean ones could be laborious, which has been taken into account by many government proposals on economic development policy.
The next decade could be China's "golden decade," in which China must finalize its first stage of industrialization and seek to achieve a more advantaged position.
