adminChina — a developing nation with a population of 1,3 billion people — is the world’s fastest growing economy, trumping such world superpowers as the European Union economic bloc, the United States and Japan. It has maintained this status quo on the back of a vibrant agricultural sector, which is the backbone of its economy. In trade volumes, it is the world’s number one producer and exporter of goods.
Addressing Zimbabwean journalists and information officers attending a three-week seminar here yesterday, an expert on the Chinese economy, Mr Sun Qiming, said China was sitting on $3,2 trillion in foreign currency reserves and its GDP growth was pegged at $4,4 trillion this year.
Economic analysts expect it to maintain its growth forecasts this year while the EU — reeling under a debilitating debt crisis — is not expected to attain its one percent growth forecast. The US is also not expected to achieve its 2,9 percent economic growth rate. Mr Sun, an academic and researcher for the Chinese government, said China was now focused on improving such human development indicators as adult literacy, life expectancy and per capita GDP.
China has a low level of per capita GDP compared to other countries meaning that the wealth of the nation is concentrated in the State while ordinary people are poor.
“China is now shifting to enriching its people. We are moving towards comprehensive public service indicators,” said Mr Sun.
He said while China enjoyed a favourable trade balance with its partners, the huge foreign currency reserves flowing into the country’s coffers were a double-edged sword, which spawned inflation.
“The dilemma of too much exports without reciprocating imports is that foreign exchange proceeds cause inflation when they are liquidated into local currency. We have a skewed balance of trade in that other countries refuse to sell to us while we continually export.
“We use our resources to mass produce low end products for sale in the US and other countries but in the end we are blamed for flooding markets with cheap goods. That is not fair. We are doing all we can to upgrade our industries so that they produce high quality products,” Mr Sun said.
On the steel industry which accounts for more than half of world production at 600 million tonnes per annum, Mr Sun said they were facing problems accessing iron ore — the primary raw material — from Australia.
He said they depended on other countries for more than 60 percent of crude oil products. The resource crisis, he said, had become the main bottleneck to China’s economic development while the country’s growth model focusing on infrastructural development such as roads and rail was unsustainable.
“The government’s priority now is to slow down economic growth but that should be done gradually,” he said.
Turning to the EU debt crisis, Mr Sun said the bloc’s economic woes were a consequence of flawed economic systems.
“EU countries are not manufacturing but have maintained high standards of living. The debt crisis will linger on unless they overhaul their systems. A case in point is a country like Greece whose
workforce reports for duty at 9am and knocks off at 2pm yet they are paid for 40 months’ work in a year and also each family expects to maintain a summer villa. The Greek government is borrowing heavily to maintain its citizens’ very high living standards. That is unsustainable,” he said.
Online Reporter