From Overseas Press

Global recovery inconceivable without China

(chinadaily.com.cn)
Updated: 2011-06-17 11:24

With sluggish economic growth in Europe and the US, sustaining global recovery is inconceivable without China, says Paul Evans, director of the Institute of Asian Research at the University of British Columbia, in an article in Canada's Globe and Mail on June 16.

As the world's second-largest economy and largest exporter, China has "accounted for about 50 percent of global growth since 2008." It is now "the largest trading partner of Japan, South Korea, the Association of Southeast Asian Nations and India." Its foreign reserves have topped $3 trillion and its outbound investment has increased to about $56 billion in spite of declining global investment.

Also, China has made the most immediate impact on the world economy through "continuing support of the US deficit and as the prime driver of about half of global demand for key commodities including cement, steel, iron ore, coal and oil."

But could China be the driver of the next global recession amid acute property bubbles, industrial overcapacity and rising wages? Evans asks.

The world, and not just China, has a stake in how well they are managed, Evans argues. In the long term, China will play an increasingly important role in "managing and defining the global economy." Actually, China is playing a generally constructive role in institutions "including the World Trade Organization, International Monetary Fund, World Bank and G-20."

With greater economic weight, China will be more assertive about the rules of the game, Evans concludes. "What Beijing thinks about the preferred mix of states, citizens and markets will be a defining feature of the world economy in the messy, multicentric era we have entered."