China's New Reform Drive to Benefit World

An ongoing key meeting of the Communist Party of China (CPC) is expected to unveil a new outline for comprehensively deepening reform in the country.

Since a massive economic transformation drive was launched in 1978, China has maintained economic growth for decades and become the world's second largest economy.

China's GDP skyrocketed from 364.5 billion yuan in 1978 to 52 trillion yuan in 2012, with total trade volume rising to US$3.8 trillion from only US$20.6 billion 35 years ago.

Meanwhile, China has become an aggressive investor. In 2012, the country saw a record high of outward direct investment at 87.8 billion dollars, up 17.6 percent year-on-year, joining the ranks of the world's top three investment source countries for the first time.

China's fast growth has served as a key engine of the world economy.

According to figures from the National Statistics Bureau, China has topped the list of contributors to the global economy, with up to 19.2 percent of world economic growth coming from China in 2007, compared to only 2.3 percent in 1978.

In 2012, China's economic growth again outpaced the global average, with its contribution to world economic growth looking to record a new high.

China's deepening reforms, highlighted by a reform agenda to be issued at the end of the third plenum of the current CPC Central Committee, will unleash new growth drivers that benefit the rest of the world, analysts say.

"China's growing overseas investment will first of all benefit those countries with close relations with Beijing," said Andrey Ostrovsky, deputy director of the Russian Academy of Sciences' Far East Institute.

"Meanwhile, the world's major economies also owe a large part of their economic growth to China," he said. "China's imports and exports have a huge impact on the world economy."

More Chinese enterprises are now moving outside the country in search of opportunities, bringing with them coveted technologies and jobs for local people.

Gerrishon Ikiara, an international relations professor at the University of Nairobi in Kenya, said China's deepening reforms had a significant influence on Africa.

"Chinese enterprises have helped boost African economies with their technology and management experience, particularly in developing a green economy and realizing inclusive growth," Ikiara said.

Egypt's China expert Muhammad Abdel-Wahab Al-Sakit, a former Arab League ambassador to China, echoed the view, saying China's "go global" strategy had produced mutual benefits in many countries, as it facilitated global capital flow and market competition, bringing consumers worldwide better products at lower prices.

China's reform and opening-up, after 35 years of extraordinary exploration and notable achievements, has entered the deep-water zone where tough challenges must be tackled.

To keep up growth, China needs to take bold steps to adjust its economy, strengthen social welfare and cut red tape. A comprehensive plan to overhaul the economy is at the center of the four-day closed-door talks, to be concluded Tuesday.

CHINA MODEL

Some experts say the upgraded "China model" after the transformation of government functions will continue to play an important role in the Chinese and world economies.

Argentine economist Matias Carugati said the transformation of government functions since the start of the reform and opening-up era had brought an enormous demographic and resources bonus.

Carugati said he expected the upcoming reform in government functions to bring new investment opportunities and create a better institutional environment, which would add new space for the growth of the world economy.

Han Jae-jin, a researcher with South Korea's Hyundai Research Institute, said the implementation of the economic model driven by domestic demand would help stabilize the national economy, stimulate foreign investment and push forward the neighboring and world economies.

Yakov Berger, an Chinese studies expert at Russia's Far East Institute, said the greatness of the "China model" was effectively combining state regulation and market adjustment and keeping a dynamic balance between them.

This model would continue to provide a guarantee for China's development and inject dynamism into the world economy, Berger said.

In addition, China and the United States, two of the world's big nations, are important trade partners with economic complementarity. The reform and development of China will bring America unexpected important opportunities.

Former U.S. Secretary of the Treasury Henry Paulson said the third plenum would set the tone for the adjustment of China's economic structure in the future.

He said the world economy would gain new opportunities with China's implementation of measures, such as promoting the market's initiative function, increasing opportunities for small and medium-sized enterprises, upgrading efficiency in capital distribution and improving the balance between consumption and investment.

Douglas Paal, vice president for studies at the Carnegie Endowment for International Peace, told Xinhua at a forum Monday the prospect for a reform agenda in the financial sector was greatest as reformers in financial circles "understand the needs China faces."

"Freeing up interest rates, deepening financial markets, regulating the informal banking sector, and introducing competition, would all make sense as partial but important steps toward long-term capital account convertibility and banking efficiency," Paal wrote in an article published on the think tank's website.

"This may offer openings for foreign financial firms to participate more deeply in the Chinese economy," he said.

The inclusive and comprehensive development of China has benefited both itself and the world. And only in such a win-win way, can China realize rapid and sound development in the long term.