China has no sign of economic collapse
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E-mail Xinhua, July 21, 2012
China's economy is slowing down amid global economic volatility, but there is no sign of a collapse, a South African expert has said.
China's National Bureau of Statistics announced days ago that the country's economic growth slowed to 7.6 percent in the second quarter this year from 8.1 percent in the first quarter, the first time below 8 percent over the past three years.
Some western analysts predicted that China is facing the risk of an economic collapse.
However, Dr. Alistair Ruiters, executive chairman of Ruukki South Africa at Ruukki Group, dismissed the view, saying "China's GDP below 8 percent is not a sign of a collapsing economy, 7 or even 6 percent growth is still good."
"Economic conditions in other parts of the world are forcing China to produce less and export less, resulted in slowing down in terms of its GDP growth," he told Xinhua in an interview Wednesday.
Ruiters, former director general of South Africa's Department of Trade and Industry, said "China's economy is not independent from the global economy. There has been a housing crisis in the United States, and presently there is a financial crisis in Europe."
Growing worries about the future makes consumers more cautious on spending, which surely has an impact on China because it is a large global exporter of consumer products, he said.
"The important thing is for China to realize that it is a consumer of global major commodities, especially mining products," he said.
"China should realize the importance of controlling the value chain of those products so that it can get them at the right price," the expert added.
Ruiters noted that China's economic adjustment will have an impact on many parts of the world, but its influence on South Africa would be limited.
"It does have an impact on South Africa at the moment, mainly on raw materials, because we continue to produce in factories. We would have an oversupply of material in the market because big buyers like China may be reducing their spending due to the slowdown in the GDP growth," he said.
China has become South Africa's biggest trading partner, with bilateral trade increasing by 77 percent from 2010 to 2011, the South African Broadcasting Corp. said Wednesday.
South Africa's GDP increased 2.7 percent in the first quarter of 2012, compared to 3.2 percent growth for the fourth quarter of last year, Statistics South Africa reported on May 29.
South Africa is the largest economy on the African continent while China has the world's second largest economy.
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