Official clarifies misunderstandings about China's foreign trade

14:05, November 02, 2009      

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Lu Zhongyuan, vice president and senior research fellow of Development Research Center of the State Council (DRC) said at the 2010 China Economic Outlook Forum that people currently in and outside China have a variety of misunderstandings about China's foreign trade. He pointed out and clarified some of the misunderstandings.

Misunderstanding 1: China's an export-dependent country

Lu pointed out that it is not accurate to say China's an export-dependent country and its economic growth model is export-led.

He said that in recent years from 2001 to 2007, the economic growth was mainly driven by consumption and investment. For example, the contribution of investment and consumption in 2001 was 4.1% and 4.2%, while net export was -0.1%and there was economic growth of 8.3% that year. Take another example, from 2005-2007, net export contributed to 0.2-0.7% growth, and the remaining 8% came from investment and consumption. These two domestic demands respectively contributed to about 4.2% growth. Thus, we can tell that China's economic growth is not driven mainly by external demand.

"I do not know why they come to such a conclusion (China's economic growth is export-led). This argument has no basis in fact," Lu said.
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