Foreign Relations

NOT YET PERFECT

However, the economic development is still falling short in some areas. China needs to reduce its dependence on exports as the driving force of its economy, van Kemenade said.

He said it was smart for China in the late 1980s and 1990s to follow the model of some East Asian economies and make it a priority to increase exports. But for a country so vast as China, export-led growth is only a temporary solution.

In the past decades, Western multinationals have used China as an industrial workshop and the explosive growth in exports to America and Europe resulted in huge trade surpluses for China.

"The money was then lent to the United States to encourage its high-risk, irresponsible fiscal and monetary policy, and to finance its wars," he said.

In his opinion, the living standards in China could have risen much more if China had used more of its foreign currency reserves for domestic development, particularly in the western inland areas.

China needs to shift its focus from exports to domestic consumption because the world economy can not continue to absorb Chinese exports in such a big way, the Dutch expert argued.

China and the United States started strategic economic dialogue in 2006, partly to address the massive trade imbalance, he said, adding that the same mechanism has been set up with the European Union this year.

CONTRIBUTION TO WORLD PEACE, PROSPERITY

The rise of China has generated talks of "China threat" in the West, but van Kemenade believes China has made considerable contributions to world prosperity and peace.

Van Kemenade said China through its economic development has benefited the world economy. "China is a big manufacturing center and it has contributed reasonably good quality products to many parts of the world," he said.

While there have been some problems with food products and toys in recent years, "China in general is contributing a lot to the economic well-being of the world as a whole," he said.

Cheap Chinese products also helped to keep the inflation down and improve the living standard in many parts of the world. "China is making a positive contribution to the maintenance of prosperity even in Western countries," he said.

Speaking of the rise of protectionism in Europe and America, van Kemenade said it is unfair to accuse China of stealing Western jobs. "It is the big corporations which have brought the jobs to China."

On the impact of China's rise on world peace, van Kemenade said he does not think China has real ambitions to become a global military superpower. On the contrary, China is playing a relatively "constructive role" in maintaining world peace.

China's hosting of the six-party talks on the Korean Peninsular nuclear issue, for instance, is a major contribution to Asian regional security as well as to world peace, van Kemenade said.

He commended China for actively participating in United Nations peacekeeping missions, sending troops to many crisis areas in the world.

In the Balkans, the Middle East and the recent Georgia crisis, China has been advocating finding solutions through peaceful means, he said.