| The theme of the 2012 Boao Forum for Asia 2012 is: Asia in the Changing World: Towards Sound and Sustainable Development. While the world is changing and China is changing, one view was firm during forum participants' discussions: Change is the thing that will contribute to China's sound and sustainable economic development in the future.
Uncertain factors
In the opening ceremony on April 2, 2012, Li Keqiang, Vice Premier of China's State Council, said Boao was once an obscure fishing village, but now it has developed into a big platform where Asian countries can gather to talk about Asia's future development. This is just what happened to a small fishing village within 10 years. A changing world is more attractive. Italian Prime Minister Mario Monti, the only non-Asian state leader at the forum, said the eurozone's sovereign debt crisis is not over yet, while the international economic and financial prospect is not clear, so there are still many uncertain factors in the world which may lead to many changes.
With an increasingly rising voice for change, the Boao Forum has many sub-forums surrounding the topic of change. The sub-forum on energy and resources focused on the change in supply and demand, the sub-forum on employment and growth focused on the structural changes in the labor force, and the sub-forum on the rising Asian middle class focused on the changes in consuming groups.
Before the opening conference, Boao Secretary General Zhou Wenzhong and former U.S. Treasury Secretary Henry Paulson had a talk over breakfast. Henry Paulson said both the United States and China need changes. The U.S. economy is plagued by serious structural fiscal deficits, so the Untied States must push forward reforms to set up a new taxation system so as to increase tax revenues. Paulson said the economic recession in the U.S. and Europe will surely affect China's economy, so as far as China is concerned, it needs to set up new economic balance and reduce dependence on exports.
Economic Transition: Foreign Business' Confidence Untouched
The Government Work Report this year puts China's GDP growth target at 7.5 percent, the first time in the past 8 years the projection fell below 8 percent. China has started its economic restructuring, so how will this affect those transnational companies that regard China as a potential market?
Australia-based Fortescue Metals Group Ltd. provides 155 million tons of iron ore to the rest of the world every year, 80 percent of which exports to China. This company is also closely related to China, using mine carts (a transportation tool for moving ore and materials in the process of mining) imported from the Chinese city of Qiqihar to transport iron ore. It is also considering cooperating with China's shipyards to build their own fleet. As for China's economic transition, Andrew Forrest, CEO of Fortescue Metals Group Ltd. stressed during an interview with People's Daily that only companies focusing on short-term interests will feel worried about China's transition, and no country intending to stay in China for long will be worried, but instead will feel more confident in the country.
Forrest said China's development will be of higher quality. The adjusted macroeconomic policy of China shows the Chinese Government's sense of responsibility and also the Chinese leadership's hope for long-term sustainable development of the country's economy. China's real estate market is going downward, which has resulted in the fluctuation of iron ore prices. The company's short-term profit earning will slightly shrink. However, these measures will make the society more stable, and are thus beneficial to the Chinese people and Chinese economy's long-term development. "I hope those who intend to do business for long in China will support China's transition," he said.
Grow Rate Slowing Down: Rational Chinese Economic Policy
Nobel economics laureate Edmund S. Phelps said China's export growth will come to an end sooner or later, so China needs other factors to drive economic growth. China is now paying more attention to its independent creativity, so it still has a lot of potential to be tapped for future development. Phelps said China's independent creativity will be the driving force for economic development and create enough job opportunities and this will ensure China's long-term economic growth.
Stephen P. Groff, Vice-President of Asian Development Bank, said in the sub-forum on employment and growth, the slowdown of China's economic growth is because the Chinese Government has adopted a reasonable fiscal policy and flexible monetary control policy. China's economic growth is expected to gradually warm up in the second half of this year.
The purpose of slowing China's economic growth rate is to ensure sound and sustainable economic development, said energy giants who attended the energy and resource forum. Mohamed H. Al-Mady, Vice Chairman and Chief Executive of Saudi Basic Industries Corporation said he is not even a bit worried about China's economic slowdown. The 7.5 percent economic growth rate still puts China among the world's fastest growing countries. Besides, the Chinese Government has wisely taken a series of effective measures to curb inflation, so a lower economic growth prediction will not affect the overall industry. |
