Romano Prodi, former Prime Minister of Italy, wrote an article for Italian newspaper La Stampa recently, analyzing the “New Normal” of China’s economy. He pointed out that China has made remarkable achievements over the past decades and has become the most significant driving force for global economic recovery due to its stable economic growth under the circumstance of continuing global economic depression.
The main reason for the slowing down of China’s economic growth at present is that China pays more attention to the quality and efficiency of the growth when adjusting its economic structure. China is shifting industrial structure from labor-intensive industries to research- and innovation-intensive industries, and it is constantly improving product quality and technological content. Prodi held that with its faster paces in industrial structure adjustment and overseas investment, China will connect more closely with international market and embrace a promising future for its economy.
At the beginning of the article, Prodi compared the global economy to a ship struggling on a rough sea. As the growth rate of global economy is lower than that of last year, it is urgent to let a visionary “captain” point out the direction for the global economy. Compared with general situation of the global economy, China is an eye-catching bright spot which develops its economy in a stable and rational way.
At present, China accounts for one third of the gross global economic growth, and it has become the most significant engine of global economic development due to its constantly growing foreign trade, in both export and import.
Prodi stressed that service industry, which now accounts for more than fifty percent of China’s national economy, plays the most significant role in China’s domestic economic development. With the increase in workers’ salary and labor cost in China’s tertiary industry, manufacturing, with low added value in industrial structure, is gradually transferred to other countries and regions with lower labor cost.
Therefore, China is tending to develop and produce innovative products, which requires Chinese enterprises to invest more in scientific research institutions and innovative products so as to improve quality of products and make them more competitive in international market. Prodi believed that China is playing an increasingly significant role in international market.
Prodi said that Chinese direct investment abroad had reached $130 billion in 2015, and it keeps increasing. China’s operations in international capital market, especially merger and acquisition of large-scale overseas enterprises, demonstrate Chinese enterprises’ eager for new and high technologies.
Prodi said that innovative capacity plays a key role in China’s social development. With the increase in resident income, China should meet people’s demands in both daily consumption and the improvement of livelihood.
At the end of the article, Prodi said that a series of significant moves, including the “Belt and Road” initiatives and the establishment of Asian Infrastructure Investment Bank (AIIB), will further improve the opening-up of Chinese economic market as well as its integration with the global economy. In the future, as China gradually accomplish industry transformation and upgrade, China will have a promising prospect and lead the global economy to a bright future.
By Chen Xiaochen, correspondent of Guangming Daily in Rome, captial of Italy