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Optimism abounds amid crisis

By Chen Weihua
Updated: 2009-08-13 00:00

Unlike the vast majority of consumers in most countries, which have tightened their purse-strings and battened down the hatches, the Chinese mainland has been sending powerful shopping delegations to its top trading partners: North America, Europe and China’s Taiwan province. It has also inked lucrative oil deals with Russia and Iran to pave the way for greater energy security.

This sense of optimism has been further fueled by news that countries as far apart culturally and economically as Britain and Pakistan want to borrow money from China, which now has an estimated foreign reserve of up to $2 trillion.

Nowadays, when senior US officials meet Chinese leaders, they seem less interested in chiding the country about its human rights issues than pushing the government to snap up more of their treasury bonds.

In contrast to the situation only a few months ago, State-owned and private companies are also showing a keener interest in buying cheap overseas assets, as opposed to merely thanking the European Union and other foreign governments for stemming the tide of possible losses by limiting China’s merger and acquisition efforts in previous years.

Meanwhile, those who remember the 1997-98 Asian financial crisis feel lucky that the nation’s currency is still not fully convertible, a situation that keeps it blissfully immune to attacks from the volatile world market.

The situation has also been improving in a more tangible way on the home front, with much of the population benefiting from the government’s 4-trillion-yuan ($586 billion) stimulus package, which has given birth to more-inclusive social security systems, better infrastructure and more rational industrial structure.

The glowing new outlook of the Chinese people has been widely reflected in worldwide polls. Surveys by Pew Research Center, ACNielsen and Reuters over the last year show the Chinese to be more than satisfied with their country’s economic situation. The country’s consumer confidence index also stands head and shoulders above that of much of the international community.

Corporate outlooks are similarly upbeat. The Entrepreneur Confidence Index, which measures the attitude of business executives to the economy, rose 9.1 percentage points in the second quarter (Q2) to 110.2, with the manufacturing, construction, transportation, wholesale, real estate, telecommunication, software and catering sectors leading the way.

New data about China’s GDP growth has filled investors and the general public with even greater confidence. Q2 growth of 7.9 percent has revised China’s GDP growth rate in the first six months to 7.1 percent, making the government’s original target of 8 percent for 2009 something of a distinct possibility.

As if this were not enough, China’s property and stock markets have both rebounded after a period of stagnation, while property market speculators have raised prices in major cities to new highs.

These trends have compelled many naysayer’s and cynics to admit that China may actually be able to carve a new role for itself as that of a savior by helping the world fight its way out of the recession.

Part of this optimism no doubt stems from the 30-year economic miracle that China has enjoyed following more than a century of war and political turmoil.

The successful staging of the Beijing Olympics last year and China’s first manned space flight have both buoyed up the country’s international credentials and given its people a feeling that, now, anything is possible.

The media may also have to accept some responsibility for this new flood of good feeling as it has tended to place a greater emphasis on positive stories in recent times.

However, things are not quite as rosy as all that. Potential time bombs still tick away under the surface, such as the pressure to create new jobs, narrow the widening income gap, maintain a sustainable level of investment, revive the country’s flagging export sector and put the inflation pressure in check. There are also more wide-ranging party poopers like environmental protection and widespread corruption to deal with.

But for the time being at least, most Chinese are happy simply to enjoy the party. They prefer to see the cup as half-full rather than half-empty. This ambivalence is reflected in the Chinese character for the word “crisis”, or weili, which literally translates as “danger and opportunity.”

At a time when many countries and peoples are preoccupied with the former, the Chinese are banking on the latter.