Photo: Wikimedia Commons
This is rare: Chinese premier Wen Jiabao has published an op-ed in the FT called How China Plans To Reinforce The Global Recovery.In it, he distills Chinese economic policy, and the message is: While the West teeters and slugs along, China is the locomotive of the world.
Here are they key points:
- China loves stimulus. Via the constant establishment of domestic demand, Chinese growth sailed during the entire slowdown, and that continues today.
- That stimulus represents a range of investments. China is spending $618 billion on various infrastructure programs (roads, rail, etc.), as well investments into science and technology.
- China is lowering its trade surplus. Since 2007, the country’s trade surplus as a share of GDP has gone from 7.5% to 3.1%, as domestic demand creates benefits overseas.
- China is expanding its social safety net. All Chinese now have free education. 90% of the population has access to medical co-ops. 60% of counties have old-age insurance schemes.
- China’s currency is getting more flexible, with the Renmimbi gaining 5.3% since June of last year.
- Inflation is being whipped. Price caps and supply expansion means Wen is confident of inflation being beat this year.
Finally, Wen concludes with this message of China’s big-time role in the world:
China is now at a new starting point in its drive for development. We have adopted the 12th five-year plan which calls for shifting the development model. We will continue to pursue economic structural adjustment, boost research and development, and education, save energy and resources, promote ecological and environmental conservation, and narrow the regional and urban-rural gap. China’s drive for industrialisation and urbanisation is gathering pace. Its economy is increasingly market-oriented and internationalised. We are fully capable of sustaining steady and fast economic growth.
China will continue to work with other countries with common responsibilities. We should make concerted efforts to strengthen the co-ordination of macroeconomic policies, fight protectionism, improve the international monetary system and tackle climate change and other challenges. We should welcome the fast development of emerging economies, respect different models of development, increase help to least developed countries to enhance their capacity for self-development, and promote strong, sustainable and balanced growth of the global economy.
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