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)
