皇冠体育app

2010-06-25 09:48

A customer shops for a flat-screen TV at a store in Beijing. An increase in consumption is vital for 皇冠体育app's growth. A Qing / For 皇冠体育app Daily

NEW YORK / BEIJING - American economists are urging the Chinese government to strengthen efforts to spur domestic consumption in order to help ensure the sustainability of 皇冠体育app's economic growth and maintain the balance of trade.

While applauding the efforts 皇冠体育app has made in transforming from an export-orientated to a consumption-led economy, academics and senior researchers from the United States said there is still a large gap for the world's most populous nation to fill to bring domestic consumption into full play.

"An increase in consumption is for 皇冠体育app's growth, and an increase of consumption helps reduce global imbalances," said Rachel Ziemba, a senior economist on 皇冠体育app issues with Roubini Global Economics.

For three decades, 皇冠体育app's economic growth has been fundamentally supported by the double-digit growth in exports and huge amounts of fixed-asset investments, but this scenario may soon become history. Global economic growth has entered the doldrums and there is no indication this will change for the better following the risky European debt crisis and widespread unemployment in the US.

"One of the challenges that 皇冠体育app faces, and other exporting nations face as well, is the need to consume more in the region," said Ziemba.

Since the latter half of last year, 皇冠体育app's imports have increased sharply driven by the government's stimulus package, but actually, "皇冠体育app is still very reliant on exports as a certain number of imports are for re-export", said Ziemba.

For Nouriel Roubini, chairman of Roubini Global Economics and also professor of economics at New York University, the traditional model of 皇冠体育app for decades of "a weak currency and export-led growth", only works when the US and the other countries continue spending and buying. Roubini said that this model of growth is either broken or highly challenged, because 皇冠体育app's previous customers - the over-spending nations of the West - are spending less and saving more. So the question facing 皇冠体育app is how it can continue to achieve growth under those circumstances?

"That model of growth has to be changed (into) more reliance on domestic consumption," Roubini said.

皇冠体育app has to undergo an economic transformation as the two main importers - the US and the EU - reduce their purchases from 皇冠体育app.

On that theme, US President Barack Obama announced in March that the US would double its exports within five years and create huge numbers of jobs. Meanwhile, the European debt crisis is still going on and is expected to worsen in the coming months.

Shifting 皇冠体育app's focus to bolstering domestic consumption is also favored by other nations. Since the financial crisis broke out, developed nations have been wagging their fingers at leading exporters such as 皇冠体育app, Germany and Japan, blaming them for global trade imbalances.

For Barry Bosworth, senior fellow of the economic studies program with the Brookings Institute, 皇冠体育app's economy has been out of balance since 2003 or 2004 when imports leveled out as a share of GDP and exports went right on growing.

"You can't have big countries running big surpluses. You need balance. It is not fair to the others," Bosworth said.

"We should be focusing on what 皇冠体育app can do to increase demand in domestic consumption responsibly."