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Editorials

Growth paves way ahead

(China Daily)
Updated: 2011-01-21 08:10
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The return of double-digit gross domestic product (GDP) growth for the full year of 2010 has virtually enabled China to replace Japan as the world's second largest economy.

This surely marks an exemplary end to the 11th Five-Year Plan period (2006-2010) which began with the country being the world's fifth-biggest economy.

Yet, more important than the rise in global GDP rankings, the robust economic growth shows that the country has consolidated its recovery from the global financial crisis.

Latest statistics indicate that the Chinese economy expanded by 10.3 percent year-on-year to almost 40 trillion yuan ($6 trillion) in 2010, while the rate of inflation stood at 3.3 percent.

The faster-than-expected growth figure is testament to the foresight and effectiveness of China's efforts to achieve stable growth and prevent the economy from overheating as the global recovery remains unbalanced and uncoordinated.

A close look at the latest data shows that GDP growth was 9.8 percent in the fourth quarter after slowing from 11.9 percent in the first quarter and 10.3 percent in the second to 9.6 percent in the third.

A small dip in consumer inflation from a 28-month high of 5.1 percent in November to 4.6 percent in December even provided policymakers with some badly needed breathing space to continue their fight against inflation.

On the whole, two years after the onset of the worst global financial crisis in about seven decades, the Chinese economy has barely drawn breath before resuming its ascent.

This is definitely good news for the world economy which is in dire need of sources of growth to push it out of the doldrums of recession.

For China, the strong momentum is crucial so as to turn recovery into stable growth and create a platform for the transformation of growth model in the coming years. If China is to shift swiftly away from its dependence on export and investment for growth, it has to ensure that more Chinese consumers can take home a bigger share of the nation's wealth.

Sound economic growth will allow Chinese policymakers to firmly deal with the excess liquidity they employed to counter the global financial crisis with relatively less concern for domestic job creation, while significantly raising people's income as a share of GDP.

In spite of the many macroeconomic challenges that lie ahead, China's sound economic performance in 2010 has laid a solid foundation for the country to aggressively pursue sustainable and inclusive development. Let us build on it.

(China Daily 01/21/2011 page9)

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