Editors’ Note: China’s current priority is to shift from an economy overly dependent on government investment and foreign trade to one featuring balanced growth that relies more on domestic consumption. However, this does not mean that foreign trade is no longer important or that it can be left to decline.
China’s trade development and consumption expansion in the past three decades contributed greatly to the global trade balance, Commerce Minister Chen Deming said during the China Development Forum.
“Retail sales grew by 15 to 18 percent annually in recent years, faster than the GDP growth rate. If not for this unique scenario that China created during its development, the world would have a much more difficult financial crisis to cope with,” he said.
Responding to criticism that China did not adequately consider the global trade balance as it rose to become the world’s largest exporter, Chen said such critics often ignored that China was also the world’s second-largest importer and “will be the world’s largest importer, and the biggest consumer market, in the coming years”.
China, which has more than 19 percent of the world’s population, contributed less than 1 percent to world trade more than 30 years ago, but its contribution to world trade surpassed 10 percent in 2010.
The nation’s exports and imports were basically balanced in the past three decades, with a large trade deficit in the beginning, then a trade surplus. Foreign trade has become increasingly balanced in recent years, according to Chen.
The trade surplus accounted for about 2 percent of China’s GDP in 2011, while the current account surplus only accounted for 2.8 percent of GDP, he said.
Chen said that unbalanced social development led to frequent financial crises in the past decades. Balanced trade growth in China and abroad is of great significance when the world economy is struggling for a recovery and the debt crisis in the European Union is still deepening.
However, balanced economic growth is relative and temporary, while unbalanced economic development is frequent and persistent, he noted.
Chen said that a comprehensive view should be taken in evaluating whether an economy’s growth is balanced. Economic balance, in a narrow sense, refers to whether international trade, overseas investment and immigration, as well as the balance of international payments, are balanced.
But in a broad sense, resource utilization, wealth distribution, capacity to consume, education, pensions and healthcare are all included in judging whether an economy is balanced, because of their influence on people’s lives and development.
Chen called for controlled or limited unbalanced economic growth, as well as an open mind regarding the rise of emerging economies.
“Against the background of globalization, a country’s unbalanced economic development, if out of control, will not only affect itself but also bring negative, or even disastrous, effects to other countries and the world economy, and in return worsen the unbalanced economy, which can be clearly reflected in the current expanding financial crisis,”
He added that the rise of emerging economies is the result of globalization and means more opportunities than challenges for developed economies.
“Some developed economies restrain their exports to emerging markets and limit investments from emerging economies, or even turn to trade protection measures, which is unfair and brings negative effects to domestic consumers and companies,” Chen said.
In recent years, China’s trade surplus has been narrowing, but the trade imbalance between China and the United States has been expanding.
“The US should expand its exports to China to resolve the (problem). But it did not follow this practice, though it spoke many times of loosening export restraints against China,” Chen said.
China’s new three-child policy highlights risks of aging across emerging Asia
Thailand’s (Baa1 stable) total dependency ratio is set to jump nine percentage points to 51% by 2030 – a faster increase than China’s – which will pressure public and private savings through higher taxes and social spending, reducing innovation and productivity gains.
Population aging in China (A1 stable) and other emerging markets in Asia will hurt economic growth, competitiveness and fiscal revenue, unless productivity gains accelerate, according to a new report by Moody’s Investors Service.(more…)
Clear skies over Asia’s new foreign investment landscape?
Compounding the fallout of the US–China trade war, the global pandemic and recession have caused considerable speculation on the future of foreign investment and global value chains (GVCs). But though there is likely to be some permanent change, it will probably not be as great as politicians expect.(more…)
Can border reopening revive tourism in South-East Asia?
In Thailand, where pre-pandemic tourism accounted for 11-12% of GDP, the country lost an estimated $50bn last year as Covid-19...
Thailand dropped from UK’s tough covid-19 travel ‘red list’
Earlier, Thailand was listed among countries with high infection levels that were put on a ‘red list’, requiring arrivals to...
The ASEAN-Russia Trade and Investment Cooperation Work Program
ASEAN and Russia recently agreed to enhance and widen economic cooperation at the 10th ASEAN Economic Ministers (AEM)-Russia Consultations held...
Flexible Workspace Startup Worklounge Debuts with 20+ Luxury Member Lounges in Thailand
Worklounge launches a premium membership granting remote professionals and executives access to exclusive hotel lounges across Thailand. Their platform is...
5 insights to guide ASEAN’s digital generation in a post-pandemic world
We surveyed 86,000 people from six ASEAN countries about their views for a post-pandemic world. The ASEAN Digital Generation Report...