China not source of global financial volatility
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E-mail Xinhua, August 31, 2015
The economy is regaining steam as the government has started new growth engines, including by encouraging more sophisticated equipment manufacturing and the integration of the Internet with traditional industries, by developing regional trade and infrastructure and by international industrial cooperation.
The International Monetary Fund estimated that China contributed 27.8 percent of global economic growth by last year, higher than the US contribution of 15.3 percent. The institution expects the Chinese figure to grow to 28.5 percent this year.
Although the Chinese economy is slowing down amid headwinds, it is still expanding at one of the fastest speeds in the world.
China's GDP has risen to about US$10 trillion, and a growth of 7 percent can translate into huge wealth and great opportunities.
Who is to blame?
Apple's business in China continued to experience strong growth through July and August, with accelerating iPhone activations and the tills ringing in Apple Stores faster than at any other point in the year.
"I continue to believe that China represents an unprecedented opportunity over the long term," said CEO Tim Cook. Sharing similar optimism, international investor Jim Rogers increased his stakes in Chinese stocks over the last few weeks, amid an epidemic of panic selling.
With growing economic power, China is influencing the rest of the world to an unprecedented degree. But the country is not responsible for everything. If China is not to blame, then who is?
Since the 2008 global financial crisis, many developed countries have pumped a great amount of liquidity into the market and lowered interest rates to nearly zero. Hot money flowed to emerging markets for higher returns and helped create froth and dampen policymakers' efforts to reduce leverage.
As the US economy is recovering, the federal reserve has hinted that it will hike interest rates this year, prompting international capital to flow back to the United States.
Currencies of emerging markets are under huge depreciation pressure as capital could leave in a large scale. Drastic changes in the value of major currencies make the financial market even more turbulent.
In addition, the prolonged European debt crisis casts a shadow on global economic recovery. Geopolitical issues and terrorism also add uncertainties to the world economy.
The current financial turmoil is a reflection of many complicated problems, most of which arise from Western countries, not from China.
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