China brings more economic opportunities to world

15:28, January 11, 2010      

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It is a foregone conclusion that China has overtaken Germany as the world's top exporter, judging from the current statistics available. The nation has outstripped Germany in term of monthly export volume since April last year. Its exports from January to October 2009 reached 957.4 billion US dollars as indicated by China's released customs figures, while the Global Trade Information Service Inc. showed German exports during the same 2009 period as amounting to 917.7 billion dollars.

Therefore, along with the heated debate or discussions on the possibility or feasibility about China to outreach Japan in nominal GDP shortly, its footsteps for "catching up and overtaking" others has once again been increasingly felt around the world at an even ccelerated pace.

The basics for China's outstripping of German exports rests mainly with the ensuing aspects or factors, including the in-depth, spreading industrial process, the 10-fold size of Germany's population and demographic dividends that remain un-exhausting, as all this means more large-scale production and marketing, more significant economic scales and a greater scope of economic effect in global market competitions, a vast population and unbalanced regional development, which lead to a high diversification of China's industries, and with numerous industries to be quite competitive on a global scale.

After the outbreak of global financial crisis, China's economic performance has been the best among world economic powers, and so is its macroeconomic stability; it means China's export enterprises enjoying a more stable environment than its rivals. In the meanwhile, as the demand for investment goods and luxuries bear the brunt of being reduced during the crisis, the diversity of production in China's external demand has been weakened relatively less on the whole and Germany, which is know for its input in good exports, however, suffers a greater shrinkage on the demand contraction.

As a result of the above factors, the crisis will also speed up part of the transfer of the advanced manufacturing production process to China on the whole, so that it will be facilitated to form a solid and sustainable base as an export superpower. The crisis will intensify price completion, and the state-of-the-art manufacturing industries previously concentrated in developed countries have to hasten their transfer to developing nations.

In this process, China has relatively bigger advantages in its infrastructure, supporting industries, labor force quality and the quality of public services, so it has greater advantages over other developing nations in the realm of sophisticated manufacturing industries, and it remains the top global option in the transfer of the manufacturing business to developed nations.

Moreover, the buyer's purchasing power hinges on how many products it sells to obtain revenue. Similarly, in a global market system, a nation's import capacity depends much on the export capacity. Hence, China's export growth means more new markets and fresh opportunities.

As for China's growing trade surplus and immense foreign exchange (Forex) reserve, people should see very high stakes for developing nations to bog down into the crisis of international balance of payment in the process of economic growth; those developing nations with rapid economic growth and wider development prospects often have bigger advantages than other developing nations, and so they are subsequently facing a higher frequency of crisis than peer developing countries.

Owing to a growing trade surplus and huge Forex reserve, China, however, has to pay a heavy price in its emergence of "catching up'and "overtaking'others, and this pattern is precisely the sub-prime choice China can hardly avert.

China's high-speed export growth has been coupled with an increase in the number of international trade disputes. In view of anti-dumping, countervailing measures such as the number of measures and an impacting sum of money involved, China has been the biggest victim of trade protectionism for the past decade or so.

As a matter of fact, trade dispute stems from China's faster development over the world average growth rate and gives expression to the country's rapid economic development. The impact of these trade disputes over China's total exports accounts for about one percent of the total exports. Anyway, it is unrealistic to expect no disputes, and it is more realistic or practical to envisage growth targets in the very process of coping with or resolving these disputes.

By People's Daily Online and contributed by PD reporter Mei Xinyu
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