|
As the global financial turmoil, triggered by a subprime lending crisis in the US has swept the world, Chinese leaders announced courageous measures to stabilize the world economy on various international occasions, making China’s confidence the attention of the world.
China’s confidence is based on a series of subjective and objective factors rather than having materialized from nowhere.
First, the financial crisis originated in the US. China, not being the country directly involved in the crisis, suffers less in terms of overseas investment and other potential risks. The domestic financial institutions witnessed improvement in capital adequacy ratio, governance structure as well as risk control, which are not so closely connected with “financial innovation” and financial derivative products that are considered at high risk. Furthermore, Chinese people still base their expenditure upon income and prefer saving. These elements help China stand still in economic slowdown.
Secondly, China’s economic growth is still at its peak compared to other countries however recession in the second half this year is inevitable. Meanwhile, inflation became less intense and the energy price in the international market declined, which will give economic adjustment more space.
Thirdly, the abundant foreign exchange reserve and fiscal revenue make national regulation and control stronger.
Fourthly, there are more opportunities for China to expand the domestic market in light of the global market recession. For China, the imbalance of the international market, specifically the high dependency on foreign trade and low position in the international industrial value chain, has become more and more prominent. The financial crisis will certainly speed up the pace of adjustment on the domestic economic structure and industrial upgrade.
Finally, the soft factor of culture is worth mentioning. Chinese people have experienced numerous disasters. History has proved that Chinese people can unite as one man and overcome the difficulties in times of disasters. This is a sort of cultural superiority.
However, the problems for China’s economic structure, such as high dependency on foreign trade, international market recession and overproduction will continue to affect domestic employment and consumption. It is appropriate and right for the Chinese government to issue a proactive fiscal policy, flexible monetary measures and plans to expand domestic demand.
China, regarded as a latecomer in the international financial system, is in great need of knowledge and experience. In view of its current economic situation, overall strength and international position, China should get itself involved in the system. The world needs China’s participation, and China also needs to take part. China needs to have more experts and master hands in the process.
The crisis can be interpreted as opportunities can be derived from risk. In that sense, the current financial turmoil can ensure China has an opportunity. Hopefully the country is going to accelerate economic structure adjustment, put more effort in infrastructure construction, national defense and social undertakings, and attach more attention to “creation of China” and “Chinese brand”. China will also have more say and influence in global financial system.
The financial crisis, to some extent, can help the economy “lose weight”. China should take advantage of this opportunity and optimize its economic structure. It is painful indeed, but China needs to be determined in tackling the crisis. Only through this can China’s economy become more healthy and powerful.
By People's Daily Online
|
