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Business / Economy

China transition, reforms boon for the world

(Xinhua) Updated: 2014-04-08 17:28

BOAO -- Some 3,000 heavyweights worldwide will gather in the scenic southern Chinese coastal town of Boao this week to attend the Boao Forum for Asia, with many seeking answers to a question: where is the world's second-largest economy heading?

Participants have reasons to feel puzzled. The past quarter has seen a declining Chinese yuan, more corporate bond defaults and slowing factory activity, all of which have triggered concerns over the Chinese economy.

There is no doubt China is suffering short-term pains with a string of indicators suggesting the country's first quarter growth may fall short of the annual target of 7.5 percent.

As the Chinese government puts the brakes on the economy, transition is a boon both for the Chinese as well as the world economy.

Projected expansion of about 7.5 percent, though lower than previous double-digit pace, is still enough for a major growth engine to pump consumption and investment demand into the world market. Over the long term, China aims to shift its growth model to a healthier one - one that is less investment- and export-driven and more reliant on consumption. The shift is set to offer huge business opportunities for overseas businesses.

Among all strategies, urbanization is the key driver of China's future sustainable development. Accelerating urbanization means not only high-rises, but also the emergence of the world's fastest-growing consumer market and a vibrant, burgeoning middle class craving for international brands and services.

For developing countries, China's reform itself, especially its economic restructuring, serves as an inspiration as well as a lesson on how to walk a fine line between growth and reform.

Meanwhile, the country's increasing overseas investment under the going-out strategy will help boost local employment and facilitate infrastructure development.

China's reform and opening up calls for more active interaction with global partners, just as the 1990s accession to the World Trade Organization prompted Beijing to open its domestic markets to greater competition and import international standards into its legal system.

Of course, the spill-over effects of China's transition and reforms may not all be pleasant in the short term. Some will suffer trade woes due to the country's slowdown. However, it could turn out to be the "catfish effect", prompting mutual development by facilitating reform on their own to fit better into globalization.

The arrow shot can not be turned back and neither can China's reform process. China is more open-minded for reform, introducing more competition and seeking international partnerships. Let's embrace each other and share the dividends.

China transition, reforms boon for the world

Boao Forum to be held in South China

China transition, reforms boon for the world

Boao Forum 2014 to be held in April

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