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China's Contribution to World Economic Growth Continues to Increase

Submit Time:10-03-2017 | Zoom In | Zoom Out

Author:Guo Tongxin | Source:People's Daily Online – People's Daily

Abstract:

In recent years, due to the in-depth adjustment of the world economy, the role of Europe, the United States, Japan and other major economies in driving the world economic growth is significantly weakened. Despite rapid growth, India and other similar countries fail to become a major contributor to world economic growth because of small size of economy, while Brazil, Russia and other similar countries have not yet come out of the shadow of recession. At the same time, China's opening up to the outside world is accelerating, and China's integration with the world economy is increasing. In recent years, China's economic development has entered the new normal. Although growth has slowed down, it has maintained medium-to-high growth which falls in the forefront ranks among the world's major economies. At present, China's annual contribution to the world economic growth has exceeded 30%, becoming the No. 1 engine that fuels the world economic growth. 

China's stable economic growth is the main driver of the world economic recovery 

Over the past 30+ years since the reform and opening up, China's economy has been occupying an increasingly rising share in the world economy. According to the statistical data of the World Bank, from 1979 to 2010, the contribution of China's GDP to the world economy increased from 1.2% to 9.3% (calculated as per constant prices in U.S. dollars in 2010), an average annual increase of 0.3 percentage point; in 2015, this contribution increased to 11.9%, an average annual increase of 0.5 percentage point during the "12th Five-Year Plan" period. As calculated based on prices of that year, China contributed 14.8% to the world economy in 2015, while the contributions of the United States, Japan and India were 24.4%, 5.6% and 2.8%, respectively. 

During the "12th Five-Year Plan" period, the annual average contribution of China's economic growth to the world economic growth reached 30.5% (calculated as per constant prices in U.S. dollars in 2010), ranking first in the world, an increase of 16.3 percentage points as compared to the annual average contribution of 14.2 % in the "10th Five-Year Plan" period and the "11th Five-Year Plan" period. The annual average contributions of the United States' and the Eurozone's economic growth to the world economic growth were respectively 17.8% and 4.4% over the same period. The contributions of China's growth were respectively 28.6%, 31.7%, 32.5%, 29.7% and 30.0% in 2011, 2012, 2013, 2014 and 2015, as opposed to 11.8%, 20.4%, 15.2%, 19.6% and 21.9% of the United States. 

In 2016, China's economic growth made the highest contribution to the world economic growth. Over the past year, China's economic performance was generally stable, and the annual economic growth was expected to reach about 6.7%, as opposed to the world economic growth of 2.4% predicted by the World Bank. As calculated as per constant prices in U.S. dollars in 2010, the contribution of China's economic growth to the world economic growth was up to 33.2% in 2016. If the calculation was based on prices in 2015, China's contribution would be a little higher. According to the forecast made by relevant international organizations, the economic growth rates of China, the United States and Japan in 2006 were 6.7%, 1.6% and 0.6%, respectively, and their contributions to the world economic growth in 2016 would be 41.3%, 16.3% and 1.4%, respectively. 

China's domestic demand growth makes a significant contribution to the promotion of the world trade and economic development 

In recent years, China's position in the world trade has been increasing. According to statistics made by the United Nations Conference on Trade and Development (UNCTAD), from 2010 to 2015, the share of China's exports of trade in goods in the world increased from 10.3% to 13.7% and the share of imports increased from 9.1% to 10.1%; the share of exports of trade in services in the world increased from 3.9% to 5.9% and the share of imports increased from 4.8% to 9.9%. 

In 2016, amid the world economic downturn, China still maintained a strong market demand. From January to November, China's imports of iron ores and concentrates, copper ores and concentrates, and crude oil increased by 9.2%, 30.5% and 14.0%, respectively; imports of integrated circuits increased by 9.3%; imports of pharmaceuticals and automobile parts increased by 9.1% and 8.3% respectively. From January to October, China's imports of trade in services increased by 23.7%. China's substantial growth in imports of international commodities and major industrial products has significantly improved international supply-demand relationships. It has not only boosted the economic growth of resources and energy exporting countries, but also played an indispensable positive role in the gradual economic recovery of developed industrial countries. 

Additionally, China has continued to provide the world with inexpensive but quality industrial products, making a non-ignorable contribution to reducing global production costs, advancing technological progress, and improving the lives of people from countries all around the world. From January to November in 2016, China's exports of plastic products as well as automobiles and automobile chassis increased by 7.0% and 6.9%, respectively, while exports (calculated in U.S. dollars) decreased by 4.6% and 5.3%, respectively. 

China's outward foreign investment growth injects vitality to the global structural optimization 

In recent years, with the enhancement of China's economic and technological strengths, especially the steady progress of the "Belt and Road" development strategy, Chinese enterprises "go global" at an accelerated pace, and outward foreign investment and economic cooperation flourish. Chinese enterprises have not only become important participants in the efforts made by many developing countries to improve infrastructure and accelerate the process of industrialization, but also played a key role in helping developed countries expand the market, increase employment and ease the debt pressure. According to the UNCTAD's statistical data, despite a rather late start, China's outward foreign direct investment (OFDI) has been occupying a rapidly increasing share in the world total OFDI. In 2000, China's OFDI amounted to only USD 900 million, accounting for less than 0.1% of the world total OFDI; this proportion increased to 4.9% in 2010 and further rose to 8.7% in 2015. 

In 2016, China's outward foreign investment cooperation continued to grow. From January to November, non-financial direct investment totaled RMB 1,069.63 billion, equivalent to USD 161.7 billion; the amount of new contracts on foreign projects reached RMB 1,273.17 billion, equivalent to RMB 192.47 billion. Among them, investment in and cooperation with countries related to the "Belt and Road" continued to maintain a high level. From January to November, China's enterprises directly invested USD 13.35 billion in non-financial areas of 53 "Belt and Road" countries, and signed new contracts on foreign projects in 61 "Belt and Road" countries, which were worth USD 100.36 billion, accounting for 52.1% of the amount of new contracts China signed on foreign projects over the same period. Because of the appreciation of U.S. dollars and the pressure of capital outflows in developing countries, the increase in China's outward foreign investment is an important factor in stabilizing the global financial market and economic operation. 

China's huge development potential continues to provide momentum for the world economic growth 

The long-term improving fundamentals of China's economy have not changed. China is still the world's largest developing country and has a long way to go in industrialization, urbanization, agricultural modernization and informatization, but China's economic development is promising, steadfast and resilient. China has more than 900 million laborers and more than 100 million highly educated talents with professional skills. More than 7 million college graduates and more than 5 million secondary vocational school graduates join the labor force every year. Thus, China's talent dividends continue to build up and be released. In recent years, China, with focus on the supply-side structural reform, has strived to further promote reforms in important areas and key aspects, and reform dividends are gradually emerging. "Entrepreneurship and Innovation" flourish, economic endogenous impetus continues to increase, and the continuously improving trend is consolidated. In the future, China's new economic drivers will grow faster and the structure will continue to be optimized, so the positive spillover effect of China's economy on the world economy will be further enhanced. 

The constant expansion and upgrading of China's domestic demand have provided a broader market for the world. China has entered a new stage of development featuring the growing scale of consumption, the accelerated upgrading of consumption structure, and the increasing contribution of consumption. During the "13th Five-Year Plan" period, per capita GDP is expected to increase by about 30%, and impoverished people classified by the current standard will be all lifted out of poverty. In 2015, China's higher income population exceeded more than 150 million, accounting for 20% of the urban population, and per capita disposable income of this population reached about USD 10,000. The total consumption capacities of this population are equivalent to the sum of consumption capacities in several middle countries. Markets to which these consumption capacities are input will flourish. During the "13th Five-Year Plan" period, China's cumulative imports of trade in goods are expected to reach USD 9 trillion and imports of trade in services will exceed USD 2 trillion. In 2020, China will build a moderately prosperous society in all respects, providing a large and mature market that will bring unprecedented opportunities to the world. 

Looking back, China, as the world's most populous country, managed to lift more than 700 million people out of poverty, people's livelihood changed from lack of food and clothing to moderate prosperity, and China developed from a low-income country to an upper-middle-income country, all of which represented China's great contributions to the world economy. China's industrialization and urbanization were unprecedented in the history of the world in terms of the scale and pace. China's rapid economic growth provided unprecedented interactive development and linkage development opportunities for the world, especially the neighboring countries, and had a significant impact on the world's economic prosperity at end of last century and the beginning of this century. Looking ahead, stable and healthy growth of China's economy at a medium-to-high speed will continue to serve as a strong driver for the sustained growth of the world economy in the 21st century. In the next few years, China will continue to play an important role as a high-horsepower engine in the process of the world economic recovery and growth. Surely, the world economic growth cannot depend only on China's contribution. China advocates that all countries, especially the major economies, work together with China to strengthen cooperation, promote trade and investment, and strive to boost structural reforms, in an effort to shape the world economy that is innovative, vibrant, coordinated and inclusive. 


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