Turkish economists laud China's contributions to global economy

The leaders of the Group of 20 (G20) are meeting in their 10th summit in Antalya, Turkey on Sunday and Monday, at a time when the world is facing a slowdown in both economic growth and trade seven years after a global financial crisis hit hard.

In contrast, China, the world's second largest economy experiencing now a somewhat slowdown in its growth and a downward pressure as well, has contributed to the global growth by a share of as much as 30 percent so far this year alone by maintaining a growth rate of 6.9 percent in the first three quarters, as noted by China's Vice Finance Minister Zhu Guangyao on Tuesday.

China will contribute more in the years to come, as it is striving to promote economic restructuring and reforms of both systems and mechanisms, Turkish economists who had interviews with Xinhua agreed.

"China's interaction with the world economy has three facets," said Mehmet Arda, an executive board member from the Center for Economic and Foreign Policy Studies, referring to China's demand for raw materials, exports and provision of a large amount of savings for investment.

In his view, the landscape is set to change as China has reduced its demand for raw materials, turned to the production of more sophisticated products instead of relatively cheap ones, and may reduce the amount of available savings with the ongoing transformation of its own economy.

Arda described China's "Belt and Road" concept and the Asian Infrastructure Investment Bank initiative as "genuinely bridging approaches."

"The BRICs Bank may also evolve into a similar concept," he said. "The global reactions to these developments seem to indicate that a leadership role for China is being recognized perhaps slowly, but surely, on a global scale."

Ussal Sahbaz, an analyst with the Economic Policy Research Foundation of Turkey, also spoke favorably of the initiatives.

Talking about large capital reserves and a great amount of know-how held by developing countries like China, India and Turkey, Sahbaz remarked that "The Belt and Road initiative aims to mobilize these resources to modernize the vast region of Eurasia."

"It is important to concentrate on concrete projects," he said. "We need multiple routes that link China to Europe. Why? Because our region is not politically stable ... The global supply chains cannot stand political instability."

He also highlighted the importance of institutions like the Asian Infrastructure Investment Bank, noting that the growing global economy will need an estimated 15 trillion U.S. dollars in fund for infrastructure investment in the next 15 years, twice the current investment level.

"The world will need more international financial institutions that engages in the infrastructure investment -- like the Asian Infrastructure Investment Bank -- and more private investment," he added.

Noting that China has built a very strong infrastructure for its own development, Sahbaz stressed that "The more China adopts a growth path based on domestic consumption, the larger opportunities it will create for the other emerging economies to export to China and gain from this new huge market."

Pelin Yenigun Dilek, another economist with the Center for Economic and Foreign Policy Studies, referred to the importance of developing countries within the G20 in bringing the problems of a wider range of countries into the global agenda.

China will take over the G20 presidency for the year of 2016 and hold a leaders' summit in the eastern city of Hangzhou.

"China presidency is important in broadening the framework under which problems and solutions are highlighted in G20," Dilek said, stressing the fact that China has major partners in the developed world, while some economic issues can be classified as relating to developing nations.

"Within the G20 framework, the issues that China leads will be under spotlight and it is possible that many developing nations will follow the lead," she added, citing as an example China's latest role in climate change.

Ramazan Tas, director of Ankara-based HESA Economic Research Center, recalled China's responsible role in helping to prevent the 1997 Asian financial crisis from turning into a global one.

He believes that China can play a "substantial role" in setting up new global values in economy, such as inclusive and shared economy, growth and development, harmony, competition and fair play. "China's 13th Five-Year Plan includes many of these values already."

Fatih Macit, a scholar from Istanbul-based Suleyman Sah University, noted that China "has still one of the highest growth rates among the developing countries" despite some decline in its growth.

As the Antalya summit will promote investment in less developed countries to foster global growth and ensure a balanced development, "Chinese investment in Africa and other less developed economies will certainly play an important role in global economic recovery," said Macit.

"No one denies that developing economies will be the engine of global economic growth at least for the next decade," he added. "However, these countries need large amount of investment in order to realize their growth potential."

"In this regard, Chinese interaction with the world economy will become more important as China has one of the largest funds in the world in terms of financing these investments," Macit added. Endit