China's economy in 'new normal' continues to power global growth

(Xinhua) Updated: 2015-12-22 10:43

Xi said at the APEC summit held in the Philippines in November that "through implementing the Belt and Road Initiative, we will go for even broader, deeper and more sophisticated cooperation at the regional level, and jointly foster a regional framework of open, inclusive, balanced and mutually beneficial cooperation."

Collyns said "it's certainly appropriate for China to increase its role as a provider of capital in key areas."

"Increasing infrastructure investment in Asia is a very important objective. That will benefit not just China but also benefit neighboring countries who need more infrastructure investments for being able to grow," he said.

To bolster the initiative, China has established and put into operation the Silk Road Fund and is working actively to prepare the launching of the AIIB.

Since established in December 2014, the $40 billion Silk Road Fund has invested in a range of projects such as a hydropower station in Pakistan and the acquisition of the Italian tyre maker Pirelli by China National Chemical Crop.

The AIIB, aimed at helping finance infrastructure construction in Asian countries, has attracted more than 50 countries, including some major industrialized countries like Britain, France and Germany, and is expected to begin operations in January 2016.

"The AIIB is a very good initiative. I think the US made a big mistake by staying out of it. I believe that overtime this can become a very valuable multilateral instrument for development," Bottelier said.

Optimistic outlook

In the short term, China would continue to bolster the global economy, as "the United States, Japan and Europe have all run out of ammunition," said Xie Dongming, an analyst with the Singaporean bank OCBC Bank, referring to the fact that those countries either have zero interest rate or have adopted quantitative easing policies.

The Vietnamese economist Luc said that China has strong resources with abundant foreign reserves, a humble budget deficit and low public debts.

"Thus, there is room for China to loosen its monetary and financial policies such as decreasing interest rates or dropping required reserves," he said.

Moreover, as China is determined to change its economic growth model by pursuing innovative, coordinated, green, open and shared development, it is expected to achieve a sustainable development and balanced growth, which is good for the whole world.

China's 13th Five-Year Plan, a blueprint for China's development in 2016-2020, clearly lists innovation as the number one driving force for growth which focuses on quality and efficiency.