The governance and structure of the global economy is undergoing a fundamental transformation as the power of the emerging markets while that of developed economies wanes, said a noted Chinese economist in an interview with People's Daily. In that context, China has a bigger role than ever to play in the process, he said.
Developed countries can hardly restore their potential growth to the level it was at before the global financial crisis. Emerging markets, though they also face the pressure of a slowdown in potential growth, enjoy a prospect of much higher growth compared with the developed countries and will continue to be the driving force for the global economy.
To reflect that change, reform has been high on the agenda of the bodies responsible for international political and economic governance. Ba believes that new progress will be made soon. The IMF, for example, is considering quantitative rules for its members' economic indicators, such as trade surplus, foreign exchange rate and forex reserves.
Two opposite actions will be the keystone of the global economic restructuring. While developed economies need to boost their savings, export and manufacturing, emerging economies need to expand their consumption and imports.
Given that, Ba said increasing imports makes sense not only for trade balance, but also — and more importantly — for the rebalancing of China's macro-economy and the restructuring of the whole national economy.
That principle has been enshrined in the blueprint for 2011 as a decision made by the central economic meeting early this month.
However, external adjustments are as important, if not more, as internal ones. Global economic and trade balance cannot be possible without fundamental transformations in different economies.
Developed economies like the United States have to fix the problems on the balance sheets of their financial institutions, companies and households alike, Ba said.
The next five years will be the stage when China begins and expands its engagement in the global economic restructuring, he said.
By Li Jia, People's Daily Online
Source: People's Daily Online
http://english.peopledaily.com.cn
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