S. M. Hali
Chinese Premier Li Keqiang’s keynote speech at the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland has been lauded by economists and entrepreneurs around the globe.
In his address, Li pledged that China will deepen its comprehensive reform, open the country wider to foreign investors and continue to promote the liberalization and facilitation of trade and investment. These commitments spell out a “new normal” of Chinese economy, featuring positive trends of stable growth, an optimized structure and enhanced quality. Highlighting the setting of fresh standards by China, Li invited all countries to join China in promoting opening up and innovation, oppose protectionism, expand regional economic cooperation, and strengthen international coordination at macro-economic levels.
The feedback on the Chinese initiatives announced by its Premier is positive. Most European economists opine that China’s ongoing economic reforms and initiatives on regional development will benefit both itself and the rest of the world. It must be stressed that during the economic transformation and upgrading of its economy, the major risk for China was stagnation, but this peril is now behind it. It is heartening that the Chinese economy, the world’s second largest, is not heading for a hard landing but for touching even greater heights.
There is the likelihood of a dual impact of China’s economic reforms. Principally, if China grows more strongly, especially if growth is re-balanced from investment and exports towards consumption, then it benefits everyone. Secondly, making the market the main determinant of economic decisions will also facilitate trade.
It is logical that economic reforms that open up for more competition and innovation are the key to China’s sustainable development. Thus it becomes imperative that China add a new dimension to its global economic leadership by fastening economic reforms that can reverse the country’s growth trend.
Li’s keynote address to WEF has lent veracity to his previous judgment that the slowdown of China’s economic growth will not deliver a shock to the country’s economy or affect its steady and sound development. In a way, the slowdown of the Chinese economy’s pace is a positive feature since it is tantamount to the fact that the foundation of economic growth will become more solid.
Li’s speech confirms that China attaches more significance to quality of economic development rather than quantity.
In recent years, China has been zeroing in on economic upgradation through the coordination of its financial and monetary policies and through long-term investment in infrastructure. This is evident through China’s host of initiatives like the Silk Road Economic Zone, the 21st Century Maritime Silk Road, the Development Bank of BRICS and the establishment of Asian Infrastructure Investment Bank, which are aimed at funding global public investment and spell win-win outcomes.
Chinese aspirations to finance global public investment are commendable as they will help push growth since new investments that are combined with economic reforms have a much better multiplying effect.
In the realm of China’s trade policies, its efforts to spur regional trade integration are important and the global market has observed an increasing competitive presence of Chinese companies while countries with a protectionist sentiment towards Chinese are waning.
It must be noted that Premier Li’s promise to continuously propel the RMB (the Chinese Yuan) internationalization process will create favorable conditions for expanding bilateral financial cooperation with most countries, who want to shed the shackles of dollar trade.
Most of the renowned international economists concur that China can step up its innovation-led growth since the Chinese government is pushing for more innovation-supporting measures, including encouraging people to start undertakings and promoting the development of the internet economy.
Li Keqiang’s speech has confirmed that the new round of comprehensive reform measures, which commenced in 2014, and restructured China’s economy, and streamlined authoritative powers to stimulate the market will continue the trend of reform in 2015 too. Thus Li Keqiang has sent a clear message of confidence in China’s economic development to boost confidence in the Chinese economy, and that of other emerging economies. In an environment where many economies are still struggling with the aftershocks of the financial crisis, the world is still trying to find a way forward but China shows the way.
The 2018 Boao Forum for Asia (BFA) annual conference is scheduled for April 8 to 11 in Boao, Hainan Province. The forum will be themed "An Open and Innovative Asia for a World of Greater Prosperity."
— The Daily Mail - People's Daily