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Focus on Boao: When will global economy recover? |
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15:35, April 20, 2009 |
The Boao Forum for Asia (BFA) Annual Conference 2009 concluded on April 19.
During the forum, attendees from China and abroad focused much attention on China's economic trends. Although some expressed concern as to whether or not China will be able to achieve its goal of 8 percent GDP growth, most were confident in China's economic recovery and believed that Asia, especially China, will have the ability to get out of the crisis.
China's economy
China's economic stimulus package achieves preliminary results
Recently released economic data for the first quarter brought encouraging news to BFA attendees, showing that China's economy is beginning to show positive signs. Li Rongrong, Chairman of the State-owned Assets Supervision and Administration Commission of the State Council of China, said on April 19 at BFA that, in March, operation indicators of enterprises under the direct control of the Central Government noticeably picked up, with profits increasing 26 percent year-on-year and 86 percent month-on-month. He expressed that the measures adopted by the Chinese government to cope with the financial crisis have already take effect.
Although he is holding a "cautiously optimistic" view of the future, Li said the recovery of the economy might be beyond people's imagination because the final outcome depends on joint efforts by the government and enterprises.
In the current situation in which developed economies are experiencing negative growth while the growth of emerging economies is generally slowing down, according to Edgar Hotard, Chairman of Monitor Group (China), the Chinese economy's 6.1 percent growth rate in the first quarter is sufficient to shore up the confidence of China and other countries in the world.
Zhou Xiaochuan, Director of the People's Bank of China, also believes that the positive financial policies and moderately relaxed monetary policies implemented in November 2008 have helped prevent the Chinese economy from sliding downward too fast.
When will the economy recover?
Emerging economies are likely to step out of the crisis first
Recently, some international organizations have successively lowered their forecasts for this year's global economic situation. The International Monetary Fund predicted that the global economy would drop by 0.5 percent to 1.5 percent, with the economies of developed countries slipping by 3 percent to 3.5 percent. The World Trade Organization (WTO) predicted that the global economy would drop by 1.6 percent while global trade volume would drop by 9 percent.
However, the Chinese economy achieving 6.1 percent growth in the first quarter has indeed struck a bright spark for the global economy on its path to recovery.
"Many people who issued very pessimistic research reports earlier in the year have now changed their tones," said Li Jiange, Chairman of China International Capital Corporation Limited.
Klaus Engel, Chairman of the Executive Board of Evonik Industries AG, said in order to cope with the financial crisis, the Chinese government has adopted many effective measures, and everyone has reasons to believe that Asia's emerging economies, especially China, will soon recover to restart economic growth.
Pascal Lamy, Director-General of the WTO, said China has been very active in financing international trade. If other countries are willing to make the same efforts as China, they are likely to tackle the international financial crisis through trade financing.
In the first quarter of the year, China's economy generally performed better than expected. Just like Li Jiange and Klaus Engel, most Chinese and foreigners who attended BFA expressed optimism that China's economy will take the lead in escaping the crisis.
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