China’s economic reform plan approved by the landmark Third Plenum in November 2013 has unleashed a sense of optimism around the globe about Beijing’s capability to steer the economy away from the export-intensive, investment-led model to one that is more consumption-based.
In a recently released report on the global economic outlook, the Organization for Economic Co-operation and Development (OECD) predicted that China’s annual economic growth is likely to accelerate to 8.2 percent in 2014 from an expected 7.7 percent this year, driven by stronger domestic demand.
Yves Leterme is the Deputy Secretary-General of the Paris-based OECD and a former Prime Minister of Belgium. He recently joined the Elite Talk program from the People’s Daily Online Business Channel to speak with this journalist about his thoughts on China’s sweeping economic reform package and what it means for the world economy in the foreseeable future. Below is the transcript of this talk.
Zhenyu Li: You must have noticed China’s new economic reform plan released after the Third Plenum, which is meant to shape the direction of China’s economic reforms for the next decade. So, what interests you the most about China’s economic reforms going forward?
Yves Leterme: Well, I’d say it is the opening of the Chinese economy to the global economy, and the fact that the Chinese domestic market will play a more important role. There is a double development underway with two very important aspects. The first is the opening of the Chinese economy and the strengthening of its integration into the global economy; and the second is the decision by China’s authorities to grant a greater role for the Chinese domestic market.
Zhenyu Li: I was told that you are an authority on institutional reforms and the OECD is also known for its good research on economic reforms. So, how do you think of the Chinese new leadership’s economic reform policies?
Yves Leterme: I think they managed appropriate steps to stimulate further development of the economy.
From the OECD perspective, what I want to add is that integrating in all senses the Chinese economy into the global trade and participating fully according to the rules of international and global trade is very important to the world economy. And then of course, issues like currency and various other things are also very important.
And secondly, I think it is very important for the Chinese leadership to continue working toward balanced development of the domestic market and opening the domestic market to global competition.
Zhenyu Li: The Chinese economy began to pick up in the third quarter and the EU also showed signs of recovery, as China and the EU have been both pursuing economic reforms. So, what do you think China’s market-oriented reforms mean for the EU and the world economy?
Yves Leterme: China’s continuing economic reforms and developments are one of the most important opportunities for the global economy and also for the European economy.
(This is a reprint from the People’s Daily Online of the December 17, 2013 edition.)