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Spotlight: China boosts world economy via investment, capacity cooperation

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BEIJING, July 31 (Xinhua) -- As growth has become a scarcity for world economy

since the international financial crisis struck in 2008, China is harnessing global

economic growth by leading regional development, promoting capacity cooperation and

establishing multilateral investment institutions.

China experienced a second-quarter economic growth of 7 percent at a time when the

country actively seeks a slowdown in pace and focuses more on efficiency of its

economy, making it still the main driver for the world economy.

The International Monetary Fund (IMF) has estimated that China contributed to

global economic growth by 27.8 percent, higher than the U.S. contribution of 15.3

percent. The institution expects the Chinese figure to grow to 28.5 percent this

year.

Shrinking demand caused by the international financial crisis has forced China to

alter its traditional way of contributing to world economy mainly by foreign trade.

As a result, the world's second largest economy has changed its role from

beneficiary of world trade to creator of new models of cooperation and from a

commodity supplier to global market to a capital provider, innovating and upgrading

the way it contributes to world economy while maintaining a stable growth in its

contribution.

Connecting Asia and the world by the Belt and Road initiatives

From the Sino-Kazakhstan capacity cooperation to the China-Pakistan Economic

Corridor funded by the Silk Road Foundation, the Belt and Road initiatives has

since its inception in 2013 been solidly pushed forward in all aspects, forcefully

fueling the economic growth of countries along the routes.

Data from the Chinese Ministry of Commerce showed that direct investment by Chinese

enterprises in 48 countries along the Belt and Road routes totaled 7.05 billion

U.S. dollars in the first half of 2015, up 22.2 percent year on year.

Over the same period, Chinese enterprises signed 1,401 construction project

contracts, with 60 nations along the Belt and Road routes, mounting to 37.6 billion

dollars in money terms.

Sun Zhenyu, director of the China Society for World Trade Organization Studies,

said that the Belt and Road initiatives underscores financing, infrastructure

building and realizing interconnectivity and intercommunication, and that it helps

to promote economic growth both in countries along the routes and around the world.

Capacity cooperation reciprocates multilateral partnerships

Chinese Premier Li Keqiang has mentioned capacity cooperation in several occasions

during his international trips this year, especially in his trip to Europe in June,

making the term a new business card for China's diplomacy.

The strategy has not only facilitated the continuing revitalization of world

economy by means of cooperation, but also followed the changing trends in the

global industrial chain. It is in line with the need for upgrading the Chinese

economy as well.

China currently has built 118 economic and trade cooperation zones in 50 countries

worldwide, with additional ones still in progress, according to the Ministry of

Commerce.

China is gaining an ever important position in the international industrial

structure. On the one hand, it has elevated its level of participation in global

industrial competition and cooperation, competing and cooperating with developed

nations while joining hands in cultivating third-party markets.

On the other hand, Chinese enterprises have consecutively adopted the going-out

strategy thanks to the advantageous technologies and experiences accumulated in

several industries.

With the world economy still slowly bouncing back, the less advanced economies and

the advanced economies will face the common challenge of the lack of infrastructure

and investment.

Given that background, international capacity cooperation can help developing

countries accelerate development in relatively low costs, promote industrial

upgrade in China and seek market expansion for developed countries, thus being a

remedy for driving global economic growth that will benefit all.

Poor facilities and insufficient investment in infrastructure have turned into a

bottleneck for the growth of the world's major economies, especially those major

developing ones.

According to the IMF estimates, every one U.S. dollar input in infrastructure will

generate three dollars extra. But the problem is that there is a severe shortage of

funds in the infrastructure development worldwide, which needs as much as 1.5

trillion dollars.

African Development Bank President Donald Kaberuka recently in Beijing praised the

Asian Infrastructure Investment Bank (AIIB) for offering a new way for global

infrastructure financing, saying it sets a good model for emerging financial

institutions in the 21st century.

Jin liqun, secretary-general of the interim multilateral secretariat for

establishing the AIIB, said that the AIIB is a bank initiated by China, but it is

not a bank of China, it is a "global bank" and a bank of mutual benefit and

multilateral win.

Accounting for one-third of the world economic aggregate, Asia now is the most

dynamic region in the world. The AIIB will promote the economic integration of the

region, and facilitate the economic integration of the Eurasia continent as well as

the economic growth of the whole world, as Asian and European countries join in.

The BRICS New Development Bank (NDB) officially opened in Shanghai last week to

finance infrastructure projects, mainly in BRICS countries, and K.V. Kamath from

India has been chosen as the president of bank. The first batch of projects of the

bank are expected to be implemented by April 2016.

The NDB, launched by Brazil, Russia, India, China and South Africa, has an initial

capital pool of 100 billion dollars. The new bank, together with the AIIB, will

become an important new force in the world to advance infrastructure construction

and sustainable development.

Some experts studying BRICS countries said that the world now more than ever need

development banks to tackle challenges faced by infrastructure and sustainable

development, and China is leading the development of a series of institutions in

the emerging markets in the region and beyond, to finance economic development and

maintain financial and business power.

BRICS countries accommodate 42.6 percent of the world's population and share 21

percent of the world's economic aggregate. Trade value among them accounts for 15

percent of the world's total. They contribute 50 percent to the global growth.

The establishment of the NDB will greatly push ahead the South-South cooperation

and help boost the rise of emerging economies as a whole in the world.

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