By Long Guoqiang

Research Report Vol.18 No.6, 2016

After more than 30 years of deepened reform and further opening-up, China has maintained rapid economic growth and enhanced economic strength. As an emerging economic power, we firmly grasp the strategic opportunity of economic globalization, deepen cooperation with the international community, and actively participate in international economic governance system to jointly cope with challenges, promote recovery of world economy, and make efforts to realize win-win cooperation with the rest of the world.

I. China as the Most Important Contributor to World Economic Growth

After more than 30 years of reform and opening-up, China has achieved a historical leap in its economic development, rising from a country with trade ranking the 32nd in the world depending on exporting primary products, and becoming the world’s largest leading exporter of manufactured goods. At present, China is the world’s second largest economy, the biggest exporter of goods trade and the largest trade nation, one of the world’s top three countries in utilizing foreign capital and foreign investment. There is no doubt that China’s economic development is a miracle in human history.

China’s economic miracle is attributed fundamentally to the reform and opening-up. China is at the primary stage of socialism, where the major problem is the contradiction between people’s growing material and cultural needs and backward social production. The main contradiction determines our fundamental task is to focus on the development of social productive forces. Focusing around the central task of economic development, we uphold the direction of reform toward the socialist market economy, continue to deepen reform and constantly emancipate the mind, release and develop productive forces, release and strengthen vigor of the society. Through reform, we effectively stimulated the enthusiasm of the labor force, greatly stimulated the dynamism of economic development, fully released the potential of economic development, and achieved the high-speed economic growth for more than 30 years consecutively in China.

Two supporting respects ensure China’s economic take-off. One is reform, and the other is opening-up to the outside world. With the accurate judgement of the strategic opportunities brought by economic globalization, and based on China’s comparative advantages, we formulate the opening-up strategy which is suitable for China’s development. Adopting effective measures, we make full use of the “two markets and two resources”, utilize our advantages and avoid the disadvantages. China always adheres to its basic national policy of opening-up, establishes new systems for an open economy, and creates new advantages of participation in international economic cooperation and competition.

With the enhanced overall economic strength, China makes greater contribution to the world economic growth. According to the estimation by the Project Group of the Development Research Center of the State Council, China’s contribution to world economic growth grows from 3.8% in the 1980s to 20.9% in the first decade of new century. After the 2008 global financial crisis, China’s contribution to world economic growth further rises to more than a quarter, surpassing the US and becoming the largest contributor to world economy. China supplies the global market with huge quantities of low-priced manufactured goods, effectively curbing global inflation, which is conducive to the stability and growth of the global economy, and also greatly enhances the consumers’ welfare in the importers. China’s imports of goods and services reach more than $2 trillion a year, which becomes the huge market for goods and services around the world, and promotes the recovery of the world economy. China implements the policy to encourage the utilization of foreign capital. Since 1993, China has ranked the top among developing countries receiving the most foreign direct investment. It has been the top three host countries with the most foreign direct investment, providing the investors around the world with the opportunity to share China’s economic development. China’s rapid rise to become the world’s third largest foreign investor has injected new dynamism to cross-border investment growth around the globe. China’s overseas investment also continues to contribute to the economic development in the host countries. In particular, China’s investment in developing countries brings them applied technology, which is of special significance for those countries in promoting industrialization, accelerating technological progress, increasing employment and reducing poverty. As a result, more and more countries regard it as one of the important contents in developing their economy to attract Chinese enterprises to make investment.

China plays an important role in global economy and financial stability. In the late 1990s when Asian financial crisis broke out, China adhered to the position that Chinese currency RMB would not devalue, which became the mainstay against the financial crisis. After the outbreak of international financial crisis in 2008, China worked closely with the international community, coordinated policies, and actively made concerted efforts to cope with the financial crisis. On the one hand, the Chinese government took the initiative to adjust macroeconomic policy, worked on expanding domestic demand and adjusting economic structure, as a result of which China achieved stable economic growth, and strengthened the confidence of the world to deal with the crisis. On the other hand, China actively participated in international cooperation to cope with the global financial crisis, which has made its own efforts to stabilize global financial markets, and has been highly praised by international community.

II. China as a Responsible Participant in Global Economic Governance

Global economic governance system is composed of a series of rules for international economic and trade cooperation as well as corresponding institutions. Founded after World War II, Bretton Woods System established the basic framework of global economic governance. With time passing by and the changing situation, the global economic governance system evolves. The current global economic governance system provides the driving force and guarantee for economic globalization, which helps promote international trade and investment, and facilitates global economic prosperity and financial stability.

At present, the global economic governance system is at the phase of change. First of all, it is important to improve the representativeness of the global economic governance system, and fully reflect the new changes in international economic landscape. Since modern times, emerging economies and a large number of developing countries develop rapidly, and their international influence continues to grow. This is the most revolutionary change in the comparison of international power. Therefore, it is important to enhance the representativeness and discourse power of developing countries in the current global economic governance system, and advance democratization and legalization of global economic governance. Second, it is important to promote fairer and proper international rules, trying to make a more balanced global economic governance system reflect the wishes and interests of different countries, to safeguard the interests of developing countries, and truly realize the equality of rights, opportunity, and rules. Third, it is important to adapt to the new demand of international economic and financial development, establishing and improving new mechanisms and rules constantly. As economic globalization advances and international division of labor further deepens, a lot of new areas such as global production value chain, cross-border investment, e-commerce, network information security urgently call for the formulation of corresponding international rules. In addition, there is also a need to enhance the ability of global economic governance system to cope with financial crisis. These new areas of demand and new challenges call on all countries to strengthen cooperation and improve global governance system. ...

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