OPINION> Commentary
High hopes for 2009
(China Daily)
Updated: 2009-01-24 08:04

Chinese individual investors are expecting the domestic stock market to turn bullish in the Year of the Ox.

However, for policymakers, the Chinese New Year brings with it not only a sense of auspiciousness, but also a tough test. If the country is to make the New Year a successful start to another three decades of remarkable economic growth, the authorities must demonstrate a resolution stronger than ever to address the current economic problems with a long term view.

After five years of double-digit growth, the Chinese economy slowed considerably, as the global financial crisis hit its export sector hard last year. Gross domestic product grew only 6.8 percent in the fourth quarter, a sharp slowdown compared with a 13-percent growth in 2007.

Given the gloomy global growth outlook, the Year of the Ox will prove difficult for the Chinese economy.

Externally, with no end in sight for the downturn, talks are emerging that a second round of a financial tsunami is already around the corner.

Worse still, the fact that Western policymakers are irresponsibly accusing China of saving too much or manipulating its currency does not bode well for the world. If joint efforts are not made quickly to curb the rise of protectionism in developed countries, the world economy will not recover any time soon.

Domestically, the Chinese government has to cope with the most difficult year of this century for China's economic development.

Though a deep national coffer and ballooning foreign exchange reserves have put the country in a better position to survive the current crisis, the impact of shrinking global demand on China's export growth, and thus employment, will still be very huge.

Nevertheless, difficult as it is, the coming Year of the Ox marks a much better starting point than that of the past three decades when the country began its reform and opening up.

In view of the progress the country has made during the past 30 years, it is reasonable to expect that China will achieve more and better in the next three decades.

The challenges that China faces in the New Year will put to test the Chinese authorities' commitment to deepen reform and opening up.

The Chinese government has made clear its determination to take more steps in the first quarter of this year to reverse the trend of the economic slowdown as soon as possible and realize a good start for 2009.

It is hoped that the Year of the Ox will lay down a solid foundation for China to continue its long-term growth story.

(China Daily 01/24/2009 page4)