China’s economy has huge potential, says U.S. scholar
China’s economy continues to have massive growth potential, a U.S. scholar has said.
“I feel quite optimistic about the country realizing its potential,” Khairy Tourk, professor of economics with the Stuart School of Business at the Illinois Institute of Technology in Chicago, told Xinhua.
The Chinese economy prioritizes long-term structural growth over the short-term, he said. “That’s one reason why the country’s leadership considers saving lives more important than short-term GDP (gross domestic product) growth.”
On the supply side, China has a blueprint for changing its economy from a low-end manufacturer to a high-end producer, said the scholar. Increasing domestic consumption figures prominently in the country’s long-term growth plans on the demand side.
This has advantages in raising people’s living standards and acting as a hedge against external shocks, Tourk said.
Besides its vast market, the China-proposed Belt and Road Initiative is expected to expand its market opportunities substantially, Tourk added. “The ease of doing business in China is also a major factor in attracting foreign capital.”
Speaking of China’s efforts to build a unified national market system, Tourk praised the policy as “a major step in the right direction,” saying increasing production mobility would increase market efficiency.
“Another advantage is the possible rise of new Chinese brands,” he added.
While supply chains in the world’s major economies have not recovered, Chinese production has continued to operate efficiently, Tourk said. “Its high localization rate will make for a quick recovery in industrial production after the pandemic. The result has been a robust export growth.”
“I have full confidence in the robust Chinese foreign trade sectors,” Tourk said, naming low inflation and a stable Chinese currency as guarantees.
Unlike Western countries, which mainly rely on monetary policies to deal with economic challenges, China’s kit has more fiscal policy tools, said the scholar.
While the United States has flooded its market with cash, spurring inflation which now haunts its economy, he said China has kept its interest rates constant to avoid hurting medium- and small-sized companies.