China's unique economic model to provide stability: think-tank

LONDON - A new economic report by Chinese and Western economists published by a leading British think-tank on Monday argues that China can look forward to a period of stability that runs counter to the gloomy predictions of some Western economists.

The National Institute for Economic and Social Research (NIESR) in London published a special issue of its 'Review' devoted to the Chinese economy.

Five articles looked at the drivers of China's growth, the integration of its financial markets with those of the rest of the world, inflationary pressures, the housing market, and cost competitiveness and productivity trends across China's regions.

The five reports in the review have been written by a team of Chinese and Western economists.

The report argues that while China undoubtedly faces challenges, it faces them from a position of strength relative to earlier periods in its history.

The burgeoning middle-classes offer new opportunities to China's producers, sending them up the value chain to produce goods and services that an ever-more sophisticated consumer base demands.

This can only be good news for China, the report argues, but warns that wage inflation must be kept in check, while the demands of workers for better working and living conditions are met.

"It is phenomenally difficult for Western economists and observers to gain insights into what goes on in the Chinese economy because China has achieved a level of economic growth that is unprecedented in world history," Alex Bryson, principal research fellow at NIESR and editor of the review, told Xinhua.

China has fundamentally different institutions to those in the West, Bryson said, and it takes some time to understand them and how they might respond to crises.

Continued critical evaluations of the Chinese economy may have come unstuck because the writers and the models they use to interpret the economy misunderstand the nature of the Chinese economy.