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China Voice: Groundless, Unfair to Blame China for Hardship

It is groundless and unfair to blame China for the global slowdown and market volatility, and naysayers’ misjudgments highlight their ignorance on the world’s second-largest economy.

Billionaire investor George Soros’ recent “hard landing” prediction at Davos renewed the decades-long “doom” theory about the Chinese economy. Other Western analysts accused China of causing global stock market swings last week.

Pessimists misunderstand the Chinese economy, or they just choose to turn a blind eye to the bright spots that really matter.

At the same time, those who blame China underestimate the West’s own problems, which were and are the major cause of global economic woes.

China’s globally-scrutinized stock market remains anemic following an unprecedented rout last summer. Lax supervision and immature investors were among the main reasons. The economic fundamentals able to sustain a long-term bullish market remain in place.

It is illogical to say that the stock plunges across the globe stemmed from China, which closed trading for a week to celebrate the Chinese Lunar New Year and did not unveil any data or implement any new policies.

Some observers said the root cause of the sweeping drops was that economic fundamentals in the West failed to support a prolonged gaining market fueled by a flood of liquidity since 2008.

To cope with the 2008 global financial crisis, many central banks had adopted easy monetary policy with very low interest rates, which encouraged excessive speculation and led to asset price bubbles.

Recent Western market swings were also partly due to persistently low crude oil prices, which forced oil producing countries to repatriate their sovereign wealth funds from overseas stock markets to ease domestic money strain.

The withdrawing of the huge amount of capital added pressure on Western banks and thus intensified the market slump.

It is undeniable that China’s pace of growth has slowed, but newly-added economic output in 2015 was more than the GDP of Sweden or Argentina. China is still a key propeller of the world’s economic growth, contributing more than 25 percent of global growth in 2015.

The world started a guessing game way back in the 1990s on when the Chinese economic miracle would collapse.

For decades, whenever the global economy faced troubles, China was surely to blame: a rising China exploited developing countries and a slowing China dragged down developed economies.

This prejudice and stereotype is unfair and needs to be corrected.

Acknowledging the bright side of the Chinese story and seeking win-win cooperation can bring overseas investors great opportunities.

While Soros forecast that “a hard landing is practically unavoidable,” IMF chief Christine Lagarde said China is going through a massive, multi-faceted transition and “we do not expect a hard landing of China as has been talked about for many years.”

Foreign direct investment in China grew 6 percent in 2015 to 136 billion U.S. dollars, making the country the third-largest foreign capital receiver in the world.

One in five BMWs sold globally in 2015 was bought by a Chinese driver.

Chinese tourists made 120 million overseas trips in the same year, spending more than 1 trillion yuan (153.8 billion U.S. dollars) on shopping.

Box office sales during the Spring Festival holiday surged 67 percent year on year to 3 billion yuan.

Per capita disposable income in the country increased 7.4 percent in 2015, and thickening wallets will enable the Chinese to consume even more, as is encouraged by the government.

China’s economic structure continued to improve, with the expanding of services, consumption and high-end manufacturing.

The Chinese government is renowned for efficient implementation and the leadership has a strong political will to deliver its promises of a better life for its people and business opportunities for all investors.

China indeed is suffering the pain from a difficult economic transition. Its leaders never sidestep economic problems and they are taking steady and concrete steps to solve them.

China is a contributor to global recovery, rather than a trouble maker.

Feb. 15, 2016 on XinhuaNet

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