Asia to take advantage of longer tenors

15:28, April 12, 2010      

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It is a financial crisis in essence rather than an economic crisis that has ravaged the world economy since 2008. The developed nations, mainly the United States, have been hit the hardest by the global financial turmoil, and they would certainly suffer a hard blow. But Asia is however made up chiefly of the real economy. So its financial sector is not so full-fledged and impact on Asia is not so closely related to the United States as such developed nations like Japan and Europe.

It has been estimated that the financial crisis could lead to the contraction of U.S. and European markets, which would mete out a heavier blow to the export-oriented Asia countries. The intra-regional trade has grown in Asia, and trade diversification developed quite rapidly, so they do not rely heavily on the European and American nations as it used to. Asia's healthy economic growth with greater independence has been resultant from a growing regional cooperation. From this perspective, great changes have taken place among countries worldwide in term of their respective national strength.

With an extremely strong momentum in Asia's economic recovery, China, India and other nations have reported a very fast growth of gross domestic product (GDP), with a distinct indication that major changes occurred in the strategic situation of the past when " the U.S. economic sneezes, the world catches a cold" has ended.

Emerging markets, including China, should take advantages of longer tenors by utilizing the technology, capital and markets of Western developed nations but also should avoid repeating their errors in the environment protection, social policy and so on. Consequently, we should also be more rational, scientific and reasonable while maintaining a national rapid growth.

The growth of newly-emerging countries hinges chiefly on their internal driving force. China, India and other Asian countries are currently amid the mid-term industrialization and urbanization processes. And China's industrialization has pushed ahead the growth of its neighboring countries.

For the manufacturing trade at present, not all parts and spares are made by China itself since the nation, as a "world factory" base, stimulates the production of parts and spares in its neighboring countries, so that much stronger interrelated manufacturing chains and networks are created and Asian countries turned into an integrated economy.

In discussing the financial crisis, or the global economic structural imbalance, some people deem that China has "exported too much", and this is in fact a "pseudo-proposition". The Chinese exports in the world trade volume has a tiny proportion and also shares a small percentage, and China's exports are definitely that part of the labor-intensive products badly needed by the U.S.

In fact, China's export economic growth model is adapted to the development stage of Asian countries. If without an export growth in those years, it is out and out impossible to have the situation today. Any country cannot impose restrictions on its own exports. China-made products have a great competitive edge as other countries need much cheaper products, and China has scored such a large trade surplus and such a rapid trade growth. This is decided by the market and should be expanded in due course.

All goods needed by the global market can be exported as long as their production process is not detrimental to the environment and not at the cost of wasting resources. However, it should be acknowledged that China's mainstream products remain healthy and environmentally friendly.

For China, the proposed restructuring and transportation of the economic development mode is correct as a matter of course, and its economy is bound to go down this road. But we must give heed to the issue of how much time it requires to attain the goal. Hence, please not to worry but to follow in order and advance bit by bit and step by step. The direction to move toward the high-end manufacturing service is a correct way, but it requires a relatively long period of time. In the meanwhile, some policy measures to curb labor-intensive industries will be unwise as these measures neither meet China's national conditions nor conform to the market rules.

In the current global financial crisis, China's foreign trade would have suffered much more, if without such available labor-intensive goods such as shoes and shirts. Therefore, the country should not lose its comparable advantage of longer tenors, and this is precisely because it has been decided by China's present national conditions.

The three-day BFA conference, with the theme of "Green Recovery: Asia's Realistic Choice for Sustainable Growth," concluded on Sunday, April 11. The annual conference this year attracted approximately 2,000 political and business heavy-weights, entrepreneurs or experts from Asia and around the world.

Established in 2001, the Boao Forum for Asia (BFA) annual conference is committed to promoting regional economic integration and bringing Asian countries even close to their 2010 development goals.

By People's Daily Online and contributed by Long Yongtu, Secretary General of the Boao forum and former Chinese vice minister of foreign trade


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