The world economy has shown signs of sustained recovery and China will continue to lead growth, says a report on the development indicators of major economies, released by the Organization for Economic Cooperation and Development (OECD) in January.

Driving Force

Among a string of positive economic signs for China's economy, a huge domestic market and low tariffs have triggered a boom in its imports. This, in turn, has strongly boosted economic growth in neighboring countries.

In the first two months of 2010, about 43,700 tons of fruit products worth a total of nearly $49.855 million from member countries of the Association of Southeast Asian Nations (ASEAN) were exported to China through Shenzhen Customs alone. Quantity and total value showed year-on-year growth of 20.53 percent and 38.96 percent respectively. Since the official launch of the China-ASEAN Free Trade Area on January 1 this year, China's imports from the six ASEAN countries have far exceeded reciprocal imports, said Yao Jian, spokesman of the Ministry of Commerce, on March 16.

ASEAN countries are not alone in benefiting from China's dynamic economic growth.

China's imports in February reached $86.91 billion, up by 44.7 percent year on year, says the National Bureau of Statistics (NBS). This provided a huge market for the world economy.

China has become many countries' vital export market, Yao said. In 2009 China was the biggest importer from Japan, Australia, South Korea, ASEAN, Brazil and South Africa and the third largest importer from the United States, EU and India. The ratios of these countries’ exports to China against their total exports all grew in 2009. This indicates the stimulus package China set in place to overcome the financial crisis and support its economic growth not only helped its own economy to hold up, but also contributed significantly to the recovery of global economy from the financial crisis. China is becoming an important driving force for the world economy.

China's fast economic growth is critical to the world economy in the current economic environment, World Economic Forum Executive Chairman Klaus Schwab said. The country's growth remained robust even as the world economy slowed down and would become a leading component of future global economic growth.

New Normalcy

Many people believe the global economy is entering an era of "new normalcy" after the financial crisis. Zhang Xiaojing, an economist from the Chinese Academy of Social Sciences says he believed the "new normalcy" is characterized by further lessening of potential growth rates, restructuring of major economies, transformation of economic growth modes, rebalance in the global economy, restrictions on the development of globalization--especially in the financial field, greater emphasis on industrial development by major economies and the revival of "reindustrialization" proposals in developed countries.

The Chinese Government is adopting timely and forceful macroeconomic control measures to ameliorate the impact of the downturn. China's gross domestic product (GDP) rose by 8.7 percent in 2009, exceeding the pre-set goal of 8-percent GDP growth.

"In 2010, the government should continue to consolidate the achievements of macroeconomic control in order to maintain stable and rapid economic growth, and also be alert to possible inflation," said Jin Mengqin, an associate professor from the Department of the National Economic Management at Renmin University of China. "Moreover, the country should take practical measures to promote economic restructuring."

So how can China maintain its rapid economic growth in 2010? The answer is self-evident. It is time for the country to transform its economic growth mode.

Transformation Priority

China's retail sales of consumer goods totaled 2.51 trillion yuan ($367.6 million) in the first two months this year, an increase of 17.9 percent year on year. The growth rate was 2.7 percentage points higher than the same period last year, and 2.4 percentage points higher than 2009's annual rate, the latest statistics from the NBS say. China already has the economic foundation to transform its economic growth mode because it has enormous consumption ability.

"To maintain sustained and stable growth in consumer demand, it is essential to raise the income of ordinary people. After taking the first step to make the people wealthier, government policies should incline to financing the medical care, education and social security systems in order to alleviate people's economic burdens. It all comes down to stimulating consumption and returning wealth to the people," said Li Yiping, Professor at the School of Economics of Renmin University of China.

During the new round of industrial restructuring, a worldwide race in new energies has already begun. Although China has achieved significant progress in developing low-carbon industries, especially new ones, it still lags behind developed countries in key and core technologies in new energies, energy conservation, emissions reduction and low-carbon technologies.

The key to China's energy strategy, and important in achieving its energy localization and clean and sustainable energy, is renewable energy, said Huang Qili, an academician from the Chinese Academy of Engineering.

The country needs to actively encourage and guide the sound and rapid development of renewable energies by promoting technological progress, he said. This meant adopting favorable policies, taking advantage of a market economy, achieving innovation in management and formulating practical incentive policies according to principles of adjusting energy structures and reducing greenhouse gas emissions.