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Feature: China's Economy to Fly Colors in 21st Century
China is entering an upturn stage of its economic growth, and it will be one of the few economies that will experience faster growth in the 21st century, said a group of economists from the world's leading banking and investment institutions in Hong Kong.
The most important factor that keeps China's economy continuing to maintain an accelerating, sustainable growth is the country's impending accession into the World Trade Organization (WTO), said Yiping Huang, Salomon Smith Barney (SSB) vice-president for Asia Pacific economic and market analysis.
The move will not only bring in more foreign investments, but also create a more favorable environment for its development to promote thoroughgoing reform and wider opening up, Huang noted. "What is more important is that the entry into the WTO will result in a range of economic rules that conforms to the international conventions," he added.
As the largest economy in the Asia Pacific region, China's is the least affected by the global slowdown, political tension or crisis-driven restructuring, SSB's Global Chief Economist Kim Schoenholtz told Xinhua when he was on his Hong Kong mission to attend a seminar on the world's economic prospects in 2001.
"China's impending entry into the World Trade Organization, expected within the next few months, probably will lift investment and overall domestic demand," Schoenholtz explained.
In fact, China was always the world's second largest foreign direct investment country in the 1990s, next only to the United States.
Morgan Stanley Dean Witter's Asia President Xie Guozhong pointed out that most of the foreign investors are optimistic about China's reforms and they think China is the best place for long-term investment and development.
Compared with developed and other developing countries, China's macro economy is featuring a surge in retail sales, consumer
spending, enterprise investment and industrial production, Huang emphasized. "All these contribute greatly to the future GDP growth," he added.
Recently, the Chinese government has committed to increasing the fiscal spending to expand infrastructural projects and planned a pay rise for the public servants. The proposed spending on infrastructure next year is US$20 billion, US$5 billion up from the previous year.
Economists predicted that China is likely to achieve an average annual GDP growth of 7.5 percent in the next 10 more years, that will enable the country's national revenue to double.
In the next decade or more, China's capital growth may be faster but the overall economic growth will depend on the increase of productivity. Therefore, it is imperative for China to quicken the steps of urbanization and development of information and technology in the coming decades, they said.
Meanwhile, economist also believed that China will have to face the challenges of the globalization. In addition to finding an effective solution to the state-owned enterprises, the country must compete with foreign rivals.
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