World economy getting back on track, but no party time yet

BEIJING - With the US taper, eurozone upturn and sustained vitality of emerging markets, the global economy is clearly getting back on track five years after the onset of the global financial crisis.

For many business and political leaders attending this year's World Economic Forum in Davos, Switzerland, they have good reasons to think that the end of crisis is approaching. But the time for celebrations has not come yet, because the road of recovery ahead won't be easy and smooth.

While rich nations see encouraging signs of recovery following monetary easing policies, they are still far from achieving a robust recovery with significant growth in job creation.

Moreover, a bumpy exit of the quantitative easing, which had caused abrupt capital flight and subsequent currency depreciation in emerging economies last year, could disrupt capital inflows to many developing countries still struggling with numerous domestic problems.

Meanwhile, the core factors that have caused and aggravated the tragic meltdown of the international financial system still needs to be fully addressed. Systemic risks could become a ticking time bomb, but this globalized world of closely-interdependent economies cannot afford another catastrophe at immeasurable cost.

For the first time in five years, the developed world will serve as an engine of the world economy. Better yet, they can act as a responsible one by cutting uncertainties in fiscal policy and striving for a smoother exit of their stimulus measures.

They may also bring more opportunities of prosperity to the rest of the world by discarding trade and investment protectionism, and playing a more constructive role against the fragmentation of the world trade system.

As IMF chief Christine Lagarde has recently warned, global growth is still too slow, too fragile, and too uneven. A sense of crisis is still useful amid the upbeat mood at this year's World Economic Forum.

For developing countries, which account for more than 50 percent of global GDP, there is no time to lose to take real reform actions. Slowed growth in the emerging markets over the past two years have exposed the flaws of their growth model.

But as long as they can make timely structural changes, emerging markets would be able to achieve sustainable growth in the long run.

China, often viewed as an emerging market benchmark, has adopted firm measures to implement reforms. Particularly since the convening of a key party plenum in November 2013, China has quickened its paces to reform land, State-owned enterprises and the financial system. Its success will have an exemplary effect on the developing world.

As major economies pull out of a crisis-response mode to deal with chronic, deep-rooted issues of the world economy, China has played an active part.

Its mutually-beneficial infrastructure projects in many places around the world, especially in Southeast Asia and Africa, have helped boost growth momentum in those emerging, booming economies. Such south-south cooperation is a useful way to pool resources among developing countries.

The world economy has witnessed a significant change in landscape after the devastating 2008 crisis. To "reshape" the world economy, as the Davos people ponder the topic, developed countries and emerging economies should join hands and act as "double engines" of the global growth.

To that end, there is much left to do, ranging from strengthening policy coordination to mitigating geopolitical tension. But as everyone has learned from the last crisis, in this world of shared destiny, there is no turning back.