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Australian economists laud China's economic restructuring

07-27-2012 15:20 BJT

by Christian Edwards

SYDNEY, July 27 (Xinhua) - Leading Australian economists, academics and experts have lauded China for its recent policy shifts and economic restructuring, saying that China is on the right track in the light of the contracting European economy and the continued weak recovery in the United States.

China, the world's second largest economy, is striving to shift its economy toward self-sustaining growth based on domestic consumption as the global economic slowdown has hampered the growth of China's exports.

In an interview with Xinhua, David Thomas, a vice president of the Australia China Business Council in NSW, said he believes China is capable of maintaining high quality economic development through its current structural changes.

Thomas, an expert on BRIC (Brazil, Russia, India and China), said that with the massive debt problems in the United States and Europe, China has to make structural changes "to remove its dependence on exports and Western markets, and drive growth, productivity and consumption into its domestic economy."

The move, according to Thomas, will inevitably lead to a slowdown in China's GDP growth as predicted in the current Five Year Plan but it will improve the quality and sustainability of its growth in the longer term.

Thomas has spent 30 years across the Asia Pacific facilitating business and investment relationships between developed and emerging economies.

Peter David Drysdale, Emeritus Professor of Economics and Visiting Fellow in the Crawford School of Economics and Government in the College of Asia and the Pacific at The Australian National University, also said that China is capable of maintaining strong, high quality growth if it continues to implement structural reforms.

"But it will have to go further than the commitments made thus far," Drysdale said.

One Australian economist intimately familiar with China's economic agility is Tim Harcourt, the inaugural JW Nevile Fellow in Economics at the University of New South Wales.

Harcourt, who has predicted China's economic two-step in his best-selling book, The Airport Economist, told Xinhua that China can manage the structural change if it encourages "more shoppers, less shippers" and move away from export development towards domestic consumption and investment.

Professor Drysdale said that the key effects of China's restructuring will be to stimulate spending and further promote social equality.

"Domestically, these reforms will help to deliver strong, household consumption growth, a more equitable economy, one that is more able to upgrade industrially and one in which the market resumes its dominant role in driving growth, especially in the new industrial sectors and services," Drysdale said.

Australia, a mining giant, has been closely following China's economic restructuring and its many implications on the country's own growth prospects.

China is now Australia's largest two-way trading partner, with trade worth 121 billion Australian dollars (about 126 billion U.S. dollars) in 2011.

One analyst said that for Australia, there will be easing of commodity markets as resource-intensive growth in China is replaced by technology intensive and consumption led growth, but Australia will remain competitive in tougher resource markets.

Both Thomas and Harcourt agreed that this shift from within China presents Australia with a necessary opportunity.

According to the two experts, Australia's concerns are twofold: one, to successfully attract Chinese investment in Australian resources and services beyond the mining sector; and second, to shift Australian attitudes toward that critical Chinese investment.

Editor:James |Source: Xinhua

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