Groundless to Rehash the Old Line

Triggered by the Standard Poor’s downgrading of the United States’credit rating， fears over the US debt crisis are increasingly rippling across the globe. While on the other side of the Atlantic， the eurozone debt crisis threatens to spread from Greece to Italy and Spain， casting gloomy shadow over the economic recovery of Europe.

At this desperate moment， once again the world looks to the East for a gleam of hope. Quite a few economic commentators entrust China with the daunting task that is to steer the global economy to the path of steady growth. The discussion topic of “Foreign media busy speculating if China would be a world savior again” has been set forth by some venerable media outlets.

Admittedly， in a world rife with competition and schemes， all states are struggling for power and one state’s gain means another state’s loss. At present， China has risen to be the second largest economy and has seen its aggregate economic output continuously expanding， while sick Uncle Sam contracted new ailments and European economic powers are still hobbling forward. Over the years， Japan’s economy has kept vacillating between ups and downs and currently Japan has not fully recovered the trauma of the devastating earthquake and the radiation leak.

Although emerging economies such as India， Brazil and South Africa remain on a robust growth path， they are still weak in terms of economic size. Without a doubt， in such an economic turmoil， it is justifiable and understandable for the battered and tattered world economy to look to China for making a difference.

Regarding economy， China surely needs to strive to make a real difference， but the starting point should be national welfare and international responsibility should be what comes next. Actually， China remains a developing country， big but not strong. It might be said， figuratively， that China with a fastestgrowing sizable economy is puffy with “baby fat”， which should not be counted as true strength.

Therefore， to ask China to take on the role of a locomotive to fuel the global economy， while developed nations are suffering an economic slowdown， is asking too much of it. In other words， at the moment the much raved and clamored “China is the world’s savior” is not credible.

According to some commentators， China has already been “the world’s savior”during the 2009 global financial crisis. They， citing a report released by the United Nations at the end of 2009， argue that China has made significant contribution to global economic growth in the year， more than 50%. Thus， it seems feasible that China will play “the world’s savior” once again.

As a matter of fact， they are too fast at jumping at the conclusion that China was “the world’s savior” in 2009. In the year of 2009， China outperformed the GDP growth target of 8% through implementing a 4 trillion yuan economic stimulus package， which means

government investments served as the pillar of economic growth. Nevertheless， the Chinese populace benefited little from the GDP growth rate of 8.7%， let alone “people across the globe”.

By dint of its status as the third largest economy and the 8.7% GDP growth rate， China’s economy accounted for more than 50% of the global economic growth in the year of 2009， when the financial crisis crippled the United States， Japan and Europe. In the final analysis， it is only a statistical “game”， a far cry from the myth that China has saved the world economy and is the so called “the world’s savior” and so on. It is simply an inflated expression.

European countries and the United States fell into debt crisis one after another， which， following the 2009 financial crisis， bore out once again the flaws of the economic development mode of Europe and the US. It taught us a lesson that excessive financial leverage makes economy hard to control and the wasteful lifestyle of living beyond our means is not sustainable. China should draw a worthy lesson from it since over the years it has been trying to copy the growth pattern of Europe and the US.

Instead， China should take the moment as an opportunity to get rid of or adjust the unsustainable elements existing in its own development mode and accelerate its economic restructuring. These are the most urgent and pressing tasks compared with the preposterous saying that “China is the world’s savior”.

No doubt， China is forced to quicken its step in diversifying its foreign reserve， which is the most immediate impact of the debt crisis that broke out in Europe and the US. China is viewed as an important economic power in the economic globalization， and thus it is incumbent upon China to ensure the stability of the US dollar-dominated world market. But the top priority should always be given to national interest instead of others. In a word， it is totally unnecessary for China to shun or shy away from the matter of reducing its US dollar holdings (or Euro holdings when necessary).

China should refuse to be fooled by the honeyed words of the Western statesmen such as “China is a miracle” or “super powers take on responsibility”. China has suffered enough bitterness of foreign reserve currency depreciation. It is unwise of China to pay for the European and the US debt crisis with a view to “keeping face”， which meant nothing at all.

The debt crisis that broke out in Europe and the US stirred uneasiness about “double dip” of global economy. In view of this， it is advisable for China to cast an anchor to windward. Mainstream economists and government think tank， looking favorably at the prospect of Chinese economy， have been constantly denying the possibility of “double dip” of the global economy since 2010.

Afterwards this sanguine estimation seemed to be substantiated by the series of macroeconomic figures， especially the GDP growth rate， released by the Chinese government. But in fact Chinese economy is beset with numerous intractable problems that haven’t been rooted out yet.

Chinese economy is like a sick person running forward. The diseases crying for immediate cure are excessive reliance on investment， the corporation management mode of “pollution first， treatment later”， real estate bubble， and infrastructure construction featuring “high speed but low quality” and so on. Take the debt issue for instance. If seen from the aspect of the central government， the debt ratio of China is much lower than that of the Western countries and is free from sovereign debt crisis.

However， the accumulated debt of local governments has already exceeded 10 trillion RMB which is huge enough to be alarming because the debt solvency of local governments is closely related to whether the property bubble will burst or not. This alone requires Chinese government to adopt multi-pronged measures so as to guard against any possible troubles.

Europe and the US falter on debt crisis and China is gripped by its volatile economy. The sober choice that China should make amid this hubbub is not to be wheedled by the high sounding words of “world’s savior” but to focus on its own problems and clean up its own backyard. In that case， it would not only be a blessing for China but also a blessing for the whole world.

At least， international organizations such as the United Nations， International Monetary Fund and European Central Bank would not need to rack their brains for China when they are busy mobilizing their available financial， material and human resources to fight the debt crisis of Europe and the US. This is what China needs to do and this is much more substantial than to be the “savior” of the global economy.