Chinese economy blessed with huge staying power

China has issued its 13th Five-Year Plan (2016-20) at a time when the world is worried about its economic slowdown. Such worries are understandable because China is one of the most important engines of global growth. If the Chinese economy slows down further, economies that heavily rely on it for their growth will suffer "collateral damage".

But the 13th Five-Year Plan suggests that its economy still has much room for growth and will continue contributing to global growth. People need to view China's contribution differently, though.

The plan sent a message to the world that the country will maintain a medium-to-high growth rate, setting 6.5 percent as the bottom line for annual growth. This should brighten the growth prospects of many industries in China and offer more opportunities for foreign enterprises. For example, the growth of the service sector and development of new-type industries both are the result of China's economic transition and the foundation of future growth.

In fact, foreign enterprises have already increased their investments in China, which will help propel the country's economic growth and offer many benefits to multinational companies.

By deepening reform and opening-up, China will make it easier for foreign companies to invest in the Chinese market. And by making financial sector an integral part of the service industry, China will attract more foreign investment which will earn better returns.

Also, since its economic growth will rely more on innovation, technological innovation in particular, China will not only offer development opportunities to Chinese high-tech enterprises but also attract some foreign high-tech innovative enterprises.

Besides, it has become difficult for many innovative minds to find opportunities in developed economies for new products, because large multinationals control the technologies and are unwilling to let them enter the market for fear of competition with the existing technologies. People who believe this to be an unfair practice and want such products to hit the market will be attracted by China's huge market to realize their dreams. And they will be precious human resources for China to develop an innovative economy.

China's overseas investment has grown sharply in recent years, suggesting there is huge demand in China for international industrial cooperation. China's Silk Road Economic Belt and 21st Century Maritime Silk Road proposals are welcomed by the economies along the two routes. And China's overseas investment and foreign trade have increased with the implementation of the Belt and Road Initiative.

Although its economic growth is declining, China is still making the largest contribution-expected to be 30 percent this year-to global growth. China is still the world's largest importer of resources and energy.

China has set up industrial parks in many economies, which have helped their industrialization process. These economies could soon supply more low-priced products to the world market and thus offset the impact of the huge liquidity released by the central banks of developed countries, reduce inflation rates across the world and help boost global growth.

The author is deputy director of the Research Institute of World Development, China Development Research Center. Courtesy: chinausfocus.com