China's economic transformation matters greatly: experts (2)

A recent Reuters report said that China's acceptance of a slower rate of growth shows that the gradual rebalancing of the global economy long sought by world leaders is on track.

Economic success of the past teaches that consumption is a major force for stimulating economic growth. In the U.S., consumption represents about 70 percent of the country's total GDP output.

Comparatively speaking, China has huge potential to explore in expanding consumption.

Steven Dunaway, adjunct senior fellow for international economics at the Council on Foreign Relations, told Xinhua that is would be very hard for China to continue to expand its profits through trade due to a sluggish world economic recovery.

"In these circumstances, the best thing for China to do is to concentrate on development of its domestic economy and domestic demand," he said.

Steve Roach, Yale professor a former president of Morgan Stanley Asia, said in a recent article that China is doing a "far better job" in managing its economy than most give it credit. It even offered some lessons in macro policy strategy that the rest of the world should heed.

He also said China has waged a very successful campaign in controlling its inflation, which "has long been the nation's most destabilizing economic threat."

"China has plenty of ammunition in its monetary policy arsenal," while in contrast, central banks of the United States and European nations "are out traditional ammunition," and "have been forced to rely on untested and dubious liquidity injections," Roach said.

He added that China is cut from a very different cloth than the advanced economies of the West. Long focused on stability, Beijing is more than willing to accept short-term costs of a "growth sacrifice" to keep its development on track.

AIA Group Chief Executive and President Mark Tucker also viewed China as a "exceptionally well-managed economy," adding that he remained confident of China's growth because of the flexibility given by the country's policy instruments and financial backing.