China plays a positive role in world economic growth
- By Zhang Yongjun
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E-mail China.org.cn, March 1, 2016
Chinese demand secures global market stability
As global economic growth slowed down in 2015, the glut of bulk commodities was aggravated, causing a constant dip in prices.
Some media and institutions attributed the falling prices to China's downward economic growth that allegedly reduced demand for such commodities. However, the causes of declining prices of bulk commodities amid weakened international demand are complicated.
Let's take an example of oil. According to the IMF, prices of light crude oil from big suppliers such as Brent in Britain, Fateh in Dubai and Texas in the United States, plummeted by 47.1 percent last year. However, China's oil imports in that period showed no signs of decreasing; indeed, they grew around 8.8 percent. Besides, the import of iron ore increased by 2.2 percent, mineral and chemical fertilizers were up 16.6 percent and natural and synthesized rubber rose 15.3 percent; there was also big growth in inward shipments of major agricultural products.
Without the buttress of Chinese demand, in fact, the prices of major bulk commodities in the international market would have fallen even more alarmingly; China has been a major force in buoying them up. Therefore, it is ludicrous to make China a scapegoat.
The role of China in promoting stability of the international market has also been demonstrated by outbound travel by massive numbers of Chinese tourists and their high consumption at their chosen destinations that have directly yielded market growth of the target countries. Statistics show South Korea received 6.11 million visits by Chinese tourists, which accounted for 40 percent of foreign travel in the country last year.
The per capita consumption of these Chinese tourists was US$2,170, generally distributed for accommodation, public transportation and shopping, roughly totaling US$22 billion or making up 2.6 percent of South Korea's gross domestic product (GDP).
Outbound investments, incentives to the world economy
China has not only made contributions to the world economy with its own growth, but also through outbound investment.
According to United Nations Conference on Trade and Development, cross-border direct investments grew 36 percent in 2015, generally from the inflow of capital to the developed economies; direct foreign investments in the developing countries only increased by 5 percent. Except for Asia, the rest of the developing world saw negative growth of more than 10 percent last year.
In spite of the gloomy economic conditions, China's outbound investments, particularly to developing countries and regions, still increased rapidly, with last year witnessing a record high of US$118.02 billion, or an increase of 14.7 percent year-on-year.
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