Australian economist says China to remain engine of world economic growth in a decade

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China has managed its economy better than expected and will still be the engine of the world’s economic growth in the next ten years, a leading Australian economist said during an exclusive interview with Xinhua.

China did better than some commentators have suggested it might do, said Peter Drysdale, head of the East Asian Bureau of Economic Research and East Asia Forum, the Australian National University (ANU).

“China is still the engine of global economic growth. Even if China does not do quite as good it was doing at the moment, it will remain as an important source of global growth,” he said.

“China accounts for about 40 percent of the world’s income growth. That’s likely to continue this decade, not necessarily that high proportion, but a major proportion,” he said.

The Australia-China Joint Economic Report led by Drysdale suggests that China will add more global income output than all of the other major economies in East Asia, including Japan, South Korea, India, and Southeast Asia, over the next period.

Despite a better-than-expected economic performance in 2016 and a good start so far for 2017, Drysdale said that toward the end of the year, there probably would be more bites in China on the reform front “in order to navigate that transition of Chinese economy that will see China’s high-mid income status to a more advanced economic structure.”

Admittedly, China has to be prepared to confront many reform challenges and “that’s why engaging externally in the reform process through RCEP (Regional Comprehensive Economic Partnership) can help China carry those reforms through at home,” he said.

Drysdale, recognized as the leading intellectual architect of Asia and Pacific Economic Cooperation (APEC), is a strong advocate of RCEP and just returned from the latest round of RCEP negotiations in Japan last week.

“Clearly in U.S. and Europe, there is a popular push against openness,” he said, “(but) an open global economy that’s multilaterally based is very important to East Asian economies because they are so dependent on international trade to achieve a higher level of income.”

“Collectively, East Asian economies have a lot of stakes in mobilizing against those forces in Europe and North America that have put the global system under threat,” he said.

Talking about new mechanisms and initiatives like the Belt and Road Initiative, the Asian Infrastructure Investment Bank (AIIB), the BRICS New Development Bank (NDB) and the Silk Road Fund, Drysdale said they complement the established institutions.

There is vast under-investment in infrastructure, he said, noting that these institutions and new mechanisms provide a way of realizing the investment that’s necessary to ensure the gains from integration into global economy are achieved. Enditem

Source: Xu Haijing, Zhao Bo/

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