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Peaceful Development of China and Common Prosperity of the World
Latest Updated by 2006-04-05 09:01:44
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Peaceful Development of China and Common Prosperity of the World

China's GDP hit 1,823 billion yuan in 2005, up by 9. 9% over the previous year. Its strong economic growth once again has aroused world's attention. It is said the growth of China's economic scale equals to the total scale of one Austria. China's outstanding development has persisted for almost 30 years. From 1978 to 2004, the average growth of China's GDP, calculated on the comparable prices, exceeds 9% every year.

Since the second half of the 20th Century, the whole world had witnessed the prosperity of many other countries. However, none of them has been able to maintain such a rapid and sustaining economic growth like China has. Large amounts of foreign capital continuously pour into the country and products flow out. The international cooperation is intensified day by day. China has become so famous for its high-speed economic development.

As a result, many countries started to pay more attention to China. All kinds of arguments and comments follow hard at heel. Some of these are sincere appreciation and rational judgment, some are worries and anxiousness, and some are noises drumming for the "China threat" theory.

People are justified to have various opinions on rapid economic growth. Aiming to catch up with the world advanced economy, China's reform and opening is bound to produce multi effects from the very beginning.

By earnestly listening to the audience, China can soberly and carefully examine its development path and draw out a more scientific and practical blueprint. The collision of different viewpoints will help China answer the questions occurred during the opening and reform and create a more harmonious environment for the favorable interaction between the Chinese and world economy.

Part I

For the past 30 years, China has been steadfastly pursuing the reform and opening policy. By taking the advantage of the opportunities brought by the economic globalization, China has successfully maintained a sustaining and healthy economic growth. At the same time, China also created new opportunities for Asia and even the entire world. More and more people came to realize that China can contribute to the world economic growth and help both itself and the whole world profit from its development.

This is exactly why China is receiving more and more applause.

About 10 years ago, people could only predict that "China will be the world's largest potential market". But today, this huge market has started to demonstrate its capacity to the whole world. Since 1978, China's average import growth exceeded 16% every year. After it joined the WTO in December, 2001, China's annual average import value hit 500 billion dollars, created approximately 10 million employment posts for the related countries and regions. In 2005, China's gross foreign trade value topped 1,420 billion dollars, up by 23.2% over 2004 and became the third largest trade country following the US and Germany.

In 2005, China's trade volume with Asian countries and regions totaled 471.122 billion dollars, accounting for 33.1% of its gross foreign trade volume in the same year. Thanks to their close economic relationship with China, Asian countries reported a higher economic growth than the countries in the rest of the world. Recently announced statistics showed that in 2005 the trade volume between Japan and China amounted to 189.3 billion dollars, up by 12.7% over the previous year. Japan has found strong momentum for its economic recovery in its exports growth to China. This year, Japan expects its GDP growth to hit 2.5-3%, much higher than the average 1% in the past 10 years.

China has actively participated in the economic cooperation within the East Asian region and vigorously accelerated the construction of China-ASEAN Free Trade Area.

As a large agricultural country, China still imposes zero tariffs to some agricultural products produced by ASEAN countries. In July, 2005, Chinese government offered a unilateral expanding list for the goods eligible for preferential duties to Cambodia, Laos and Myanmar at the second leader conference of the Greater Mekong Subregion Economic Cooperation Program.

In a lately published report, Asian Development Bank forecasted that China will become the essential driving force to promote a quicker development of the whole East Asian area in 2006, which will expect its economic growth rate to hit 7.2% this year??ê

Both the US and the European countries benefit from China's growth. In 2005, China's imports from the EU and the US surged by 22.6% and 24.8% respectively. 90% of the Fortune 500 enterprises have entered China. Many of them also set up R&D bases in China, which play strategically important roles for their global development. According to the "Wall Street Journal", the US General Electric Company made five billion dollars of income in China in 2005. The number is expected to double by 2010.

China also has actively participated in the international division of labor forces. Taking the advantage of its outstanding manufacturing capacity, it has attracted more western investment with the world advanced management experience which has helped improved the global resource allocation. China's sustaining economic growth has further strengthened its faith and confidence in pursuing a mutual and win-win development with other countries across the world.

China has attached great importance to the stability of the developing countries in maintaining the world peace and prosperity. It has been earnestly fulfilling its obligations to the world. At the UN 60th anniversary summit in last September, Chinese President Hu Jintao delivered an important speech entitled "Making Great Efforts to Build a Harmonious World with Long-lasting Peace and Common Prosperity", which won widespread praise from the international community. China has cut down 20 billion yuan of debts for 44 under-developed countries. It will provide 10 billion dollars of loans on favorable terms to under-developed countries in the coming three years.

In short, China's development is an indispensable part of the world development. It has created inspired opportunities and promoted unceasingly expanding cooperation for the whole world.

Part II

People come to different conclusions because they observe things from different aspects. This theory also applies to China's development.

Foreign consumers prefer Chinese products for its high quality and low prices. But some "economic patriots" just worry about their local related industries.

In recent years, trade protectionism has gained momentum in a number of countries and the "anti-dumping" big sticks were frequently moved against Chinese commodities. Those who advocated trade protection have ignored a basic fact: China is not the only beneficiary of its trade growth. As a matter of fact, multinational corporations and the consumers across the world are the "biggest winners".

At the age of economic globalization, countries are bound to make structural adjustment and industrial transfer and to optimize resources allocation. China is endowed with the advantages in the labor-intensive and some technology-intensive industries. Developed countries prefer to relocate their production of textiles and household electrical appliances to China simply as a result of their decades' efforts in the worldwide industrial restructuring.

In general, China stands at the lower end in the international division of the labor chain doing low value-added production for the most time. As an article published in "New York Times" pointed out, most parts and components of the products marked "made in China" were actually made by some American-owned or Japanese-owned multinational enterprises in other countries or area. These multinationals only have their final assembly accomplished in China. This kind of global production chain can easily distort trade figures. According to statistics, 58% of China's total exports in 2005 are by foreign-invested enterprises. If deducting this part from the total, the Chinese trade surplus will be substantially reduced.

Morgan Stanley recently pointed out in a statistical repot that the US consumers had saved 600 billion dollars by choosing China-made products. According to Oxford Economic Forecasting (OEF), if without Chinese products, American consumer price would have increased by 0.5% in 2005. In 2010, the growth rate could hit 0.8%. OEF forecasted that by 2010 the American investment in China will contribute 0.7% of US GDP growth through stimulating its productivity and promote US exports. The study concluded that US-China trade will bring many "long-term benefits" to the States.

William Overholt, director of Center for Asia-Pacific Policy (CAPP) at RAND Corporation, emphasized during his testimony before the US Congress that China has brought more benefits to the US than the US has to China. China's cheap commodities and its fiscal policy in healing with US-China trade deficit have helped curb the inflation and interest rates decline in the US and prolong the economic prosperity of the country.

Before China and the European countries reached the agreement on textile trade issues, the European Commission imposed restrictions on China-made textile and clothing in last year. As a result, many clothing shops once had nothing to replenish to their stock. French daily "Le Figaro" published an articled named "Europe out of pullovers and pants", describing the pressing demand of the European businessmen and the public for the Chinese textiles. From April this year, the European Commission will tag China-made leather shoes with six-month temporary anti-dumping duties. British retailers believe that this will lead to an average 5-pound rise in price of each pair of leather shoes sold in the British business streets. The extra charge will be borne largely by consumers. British newspaper "Financial Times" recently published a letter from Bendt Bendtsen, Danish Deputy Prime Minister and Minister of Economy, Trade and Industry. In his letter, Bendt Bendtsen stressed that if the prices of Asian-made shoes rise, the EU consumers may have to pay an extra cost that is nearly 10 times higher than the profits made by the European footwear manufacturers.

Obviously, it is not wise for a country to stubbornly cling only to its individual state interests and blindly provoke trade war or disputes on the interest rate. In the face of competition, people need to adjust and adapt themselves to the new situation, rather than to exclude and confront with each other. Albert Keidel, senior associate of Carnegie Endowment for International Peace pointed out that those who have been trying to build a new "Great Wall" to withstand the influence of China will ultimately jeopardize the long-term peace and prosperity of all the parties.

Part III

China stands out by maintaining a rapid and sustaining economic development. However, no one can deny the fact that China has more than 1.3 billion people, an exceptionally gigantic "dominator". Although it has been keeping the astonishing development for almost 30 years, the average GDP per capita is only no more than 1,700 dollars, demonstrating a self-evident disparity with the thousands or tens of thousands level of the developed countries. China still needs long-term arduous efforts to reach the level equals to the medium developed countries. It shoulders heavy tasks of peaceful development and the road is still long.

More and more problems emerged together with the so-called "golden opportunities". China is facing a series of new problems and challenges in energy, ecological environment, and economic and social coordination. If China could not effectively solve all these problems, it would have no way of maintaining a sustaining development. It is by no means a pleasant thing to the rest of the world. Therefore, China proposes to promote economic and social advancement under the guide of scientific development concept. In its 11th Five-Year Plan for National Economic and Social Development, China marked out a series of detailed measures to establish a resource-saving and environmental-friendly society.

With its high-speed economical growth, China's energy consumption is rising substantially. Although the total energy consumption volume, especially the energy consumption per capita, is much lower than that of the developed countries such as the US, the Chinese government in the first place focused on internal adjustment to settle the difference between the demand and supply. It has sought to save energy, lower the energy consumption, and explore potential energy. Great success has been made in this aspect. In 2004, its energy consumption volume required for generating every 10,000 yuan of GDP dropped by 45%. For the 11th Five-Year plan period, China has fixed on another 20% decrease as a restrictive measure. It has placed great importance on new and renewable energy development. By 2020, 13% of the one-time energy consumption will be high quality and renewable energy instead of the formerly 7%.

China has been confronting with tremendous pressure on environmental production issues. Objectively speaking, this pressure, to some extent, is also the outcome of the economic globalization. China undertakes a large share of industrial processing production in the world, but also has paid impressive environmental costs for it. In recent years, China has unceasingly strengthened environmental protection activities and gradually improved the ecological environment. At the Fourth Session of the 10th National People's Congress, China for first time included the environment index target in the Development Program for National Economic and Social Development, which manifested its determination and confidence in pursuing a harmonious development between the human beings and the nature and a sustaining economic development.

Energy and environmental protection has been vital problems for most of the countries in the world. China advocates preserving the world energy resources at a safe and stable level and improving the environment through dialogues and cooperation. China anticipates strengthening the cooperation with all the other countries and jointly developing new technology to generate clean energy and improve the efficiency through constructing sample projects and setting up technological development centers. In fact, China has already unfolded fruitful cooperation with many developing and developed countries. Many countries also realized the huge business opportunities in this industry. Jean-Paul Huchon, president of the Regional Council of Paris ?le-de-France, stressed during his recent visit to Beijing that China's objectives of fighting against environmental pollution will lead to more France-China cooperation and contribute to the economic growth of France.

Development is the primary goal of China. It is also the common aspiration of the entire Chinese people to maintain a high speed development in the long run. According to the formulated targets, China's export is expected to exceed 1,000 billion dollars in 2010 and its GDP to hit 4,000 billion dollars in 2020. It will create many new opportunities for many other countries to carry on mutually beneficial cooperation with China.

According to Joseph Stiglitz, winner of the 2001 Nobel Prize in Economics, what China has brought to the world are nothing like zero-sum games. Its success can promote the prosperity and stability of the global economy. Pascal Lamy, director-general of the WTO, pointed out that the most significant achievement that the WTO has made is having successfully brought China into the organization. Consequently, more and more countries will benefit from China's opening market. The Chinese economic growth will be advantageous to all the people across the world. Some analysts also indicated that a wealthy China will be the key strength to maintain the world peace. Those who have been worrying about China's success should have questioned instead whether China's economy growth will tumble.

French newspaper "Les echos" recently published an article named "To succeed together with China". The author of the article does not agree with the "China threat" theory. Basing on the facts and rational analysis, the article expressed the wishes of the majority people across the world. China embraces the globe with an opening mind and sincerely hopes that it can "succeed together with the world".

China relies on widespread international cooperation for its development. The world also needs China for a joint prosperity. The prospect is promising for both China and other countries across the world to join hands and seek win-win cooperation.

Editor: Yan

By: Source: People's Daily website
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