China’s Contribution to the World Economy

Since the world financial crisis broke out in 2008， China has become a main engine of world economic growth.

The IMF stated during the 2014 Spring Meeting between the International Monetary Fund （IMF） and World Bank， held in Washington D.C.， that the world economy is on the rebound. The funds representatives， however， emphasized that the recovery remains feeble； long-term development of the world economy calls for every country to accelerate economic restructuring and so boost sustainable growth. Many parties at the meeting applauded Chinas continuing structural reforms.

IMF Managing Director Christine Lagarde said that China will continue to be a leading contributor to world economic growth. Ms Lagarde spotlighted the economic rebalancing taking place in China， and that it is now one of the countrys policies.

As the worlds second largest economy， China is steering its economy from one that is export-driven to that propelled mainly by services and consumption. World Bank President Jim Yong Kim commended Chinas current restructuring. Zheng Yongnian， director of the East Asian Institute of the National University of Singapore， pointed out that Chinas successful shift from an export-led to a consumption-led economic model would expand the countrys contributions to the world. Livelihood is a decisive issue， and improvements to it would promote sustainable economic development， Zheng said， adding that a market comprising a population of 1.3 billion consumers could be a shot in the arm for the world economy.

Chinas successful industrial upgrades and sustainable growth constitute a major gain for the world economy， Steven Barnett， division chief in the Asia and Pacific Department of the IMF， said during an exclusive interview with Xinhua News Agency.

Barnett also stated that China is the biggest contributor to global consumption and demand and that， in tandem with economic development， China is advancing to the upper end of the industrial chain， so making important contributions to global economic growth.

Although Chinas volume of exports has dropped， their value is higher due to increases in product added value， Ernesto Fernandez Taboada， executive director of the Argentine-Chinese Chamber of Production， Industry and Commerce， pointed out. The structure of Sino-Argentine commerce has transformed in the last two decades with the entry into the Argentine market of more and more hi-tech and high value-added Chinese products. Taboada believes that， along with industrial restructuring and upgrades， the focus of Chinese manufacturing will gradually shift towards self-innovation. “I think China has been successful in upgrading science and technology，” Taboada said.

Stephen Roach， senior fellow at Yale Universitys Jackson Institute for Global Affairs， said that Chinas unleashing its consumption potential and becoming more open would create vast opportunities for the world. If China sticks to its opening-up policy on imports， Roach said， the countrys growing demand will make it a major destination for other countries exports. China is now the U.S.s third-largest， most rapidly growing export market. It hence represents a major opportunity for American companies in both manufacturing and service fields.

From 2008 to 2012， Chinas imports grew from 6.9 percent of the worlds total to 9.5 percent， according to WTO statistics. From 2008 to 2010， the height of the financial crisis， the total volume of world imports shrank by 8.4 percent， yet Chinas imports swelled by 23.3 percent. Over the next five years， the value of Chinas imports is estimated to reach about US $10 trillion.

In recent years， Chinas worldwide foreign investments have steadily expanded against the backdrop of shrinking global investment. In 2011， Chinas foreign direct investment reached US $74.65 billion， marking the 10th consecutive year of growth. In terms of investment flow， China accounted for 4.4 percent of the worlds total， as compared to less than 0.5 percent in 2002. In 2011 Chinas forex reserves accounted for 31.2 percent of the world total， up from 8.6 percent in 2002.

Christine Lagarde welcomed Chinas decision to loosen controls over the RMB exchange rate， saying it seemed to her an appropriate step towards the currencys internationalization.

From a net capital importer to a major exporter， from indirect investment， such as buying foreign bonds， to direct investment abroad in real economy， Chinas role in the world investment arena has historically changed. The world is consequently reevaluating its understanding of Chinese capital.