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China still 'economic hope of the world': former premier of Aussie state

Xinhua | Updated: 2017-06-16 11:02

SYDNEY - With the G20 Summit in Hamburg coming up in July, former premier of the Australian state of Victoria John Brumby has said that China is still the "economic hope of the world".

John Brumby, currently serving as the chairman of the Australia China Business Council, spoke to Xinhua on the sidelines of a national forum in Canberra on Thursday that with the G20 on the horizon, the current global economic situation is "sluggish".

"Europe has picked up, the latest quarterly growth figures for Europe were quite good. So, Europe could be looking at two percent growth or thereabouts. The United States has low unemployment, and growth is still a question mark," Brumby said.

The former premier made it clear that in terms of the global economic growth of not only the G20, but all the nations, China is leading the way and currently accounts for the "best part of 40 percent of all new global growth".

"So, although China's growth rate is 6.5 to 6.7 percent, as the second largest economy in the world, the biggest in purchasing power parity terms, that growth adds 40 percent to world economic growth," Brumby said.

"Which means China is still the economic hope of the world."

As a seasoned expert on the global economic stage, Brumby said that the G20 will continue to play a major role in moving forward in terms of the global governance mechanism, and suggested that unity is the key to future prosperity.

"It's crucial and the key thing with countries right around the world, is if you can get them all kicking in the right direction at the right time, if you can get China, Europe, and the United States all ticking along, it's happy days," Brumby said.

The role of China's economy at the global level is crucial, according to Brumby who said that he has always remained "optimistic" about the state of economic affairs in China despite the views of certain analysts.

"I've seen over 20 years a lot of people talk down the Chinese economy, the growth is going to stop, they can't keep going, there will be a credit squeeze and so on," Brumby said.

"But, the drivers of their growth, the driving force of the middle class, the shift to services, the shift to consumption, the continued urbanisation, all of these things are automatically driving a very strong growth figure," he said.

It is this overwhelming economic performance that Brumby believes will lead to a return to the top of the global economic standings for China, placing the nation on the course for an ever larger role in economic governance worldwide.

"It is going to become more and more important. As I have said, China in purchasing power parity terms is now the biggest economy in the world, so this is a shift in the world order," Brumby said.

"As Henry Kissinger would say, we are going back to where the world has been for most of its modern history, when China was the biggest economy."

This will not come without challenges, and Brumby believes that China has to continue to develop even further upon its already positive strides with the Belt and Road Initiative and the Asian Infrastructure Investment Bank (AIIB).

"China will have to feel its way a little. We have seen new initiatives obviously, the Belt and Road, the AIIB, these are all instruments to drive and encourage free and global trade, and free and global investment. So they are very positive," Brumby said.

"So I think, if you look at President Xi's speech at Davos, it was very positive about openness, about open trade, about open investment, and so this is what the world economy needs,"

"China has got an important role to play, and so does Australia," he added.

Brumby remained adamant that these initiatives and partnerships that China is developing around the world will, in his opinion, lead to a future that is markedly more positive not only economically, but on a variety of other levels.

"From my point of view, the Belt and Road leads to more economic infrastructure, and more linkages between nations particularly in the Asia Pacific and more traded goods and services. So, it is unarguable this will lead to greater economic growth," Brumby said.

"The greater economic growth will lead to more jobs, more opportunities, better education outcomes, better healthcare for families, and more people lifted out of poverty,"

The Regional Comprehensive Economic Partnership, or RCEP, will continue to evolve, but Brumby pointed to the AIIB as another way in which the future will be shaped through growth opportunities for China and beyond.

"AIIB also will mean more funding and more infrastructure, and that in turn can drive productivity improvements and more trade," he said.

"I'm a big believer in more openness and more trade, and all of those things, the Belt and Road, AIIB, and others, are heading in that direction."

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