Focus on China's role in global economy

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Zhou Bajun, a senior research fellow of Hong Kong-based China Everbright Holdings

A1 The central government decided at its annual Economic Work Conference to deepen supply-side structural reform in 2017 and give priority to reducing bubbles in the real-estate market. This will help change the way it has boosted economic growth and steer the national economy onto a new track for sustained medium-to-high growth.

A2 With the pace of economic recovery picking up next year, more interest rate hikes by the Fed will push the exchange rate of the greenback higher, while that of the renminbi will fall further and negatively affect China's imports and overseas investment. Generally speaking, the US contribution to overall growth of the world economy will probably increase, while China's will likely decrease next year, both by 1 or 2 percentage points. But China will remain the top contributor.

A3 I expect the adjustment of the global situation to deepen in 2017. The refusal by the US, the EU and Japan to recognize China's market economy status according to Article 15 of the World Trade Organization agreement they signed 15 years ago means the profound readjustment of the global situation will be even deeper, and that the Doha Round of WTO talks is all but dead. Trade friction between China and the US, on the other hand, will intensify after Donald Trump takes over the White House.

China must respond to such challenges as best it can to ensure the 2017 growth goals set by the central government at the annual Economic Work Conference will be reached.

To do so, I suggest another round of domestic demand stimulation measures similar to those seen in 2009 be taken next year, while the supply-side structural reform should continue to greater depth. It is also necessary to quicken the pace of negotiations over the Regional Comprehensive Economic Partnership as well as advance more bilateral trade and investment talks aimed at enhancing friendly ties with other countries.

 

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