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Can emerging economies continue 'dream growth'?

(Xinhua)
Updated: 2008-09-29 15:18

Can the emerging economies, including China, maintain their pep and lead the growth for the world at large amid exacerbated risks of a global economic downturn? This has become a hot topic for the participants of the 2008 Summer Davos forum, which will conclude on Sunday afternoon in the north China metropolis of Tianjin.

The two-day event, also known as the Annual Meeting of the New Champions 2008 of the World Economic Forum, has attracted some 1, 400 entrepreneurs, officials and scholars from nearly 90 nations and regions, with the theme of "The Next Wave of Growth."

Samuel Dipiazza, global CEO of Pricewaterhouse Cooper, believed that the global market would remain slack in a certain period of time to come, yet the emerging economies would continue to grow.

He said he doesn't think there would be a major recession in the global economy, which faces challenges like the US credit crunch, global inflation, a weakening US dollar, volatility on the oil markets, and price hikes for grain.

Though diverging on whether the American economy would suffer a depression or not, experts reached consensus on a possible economic slowdown in the United States and ensuing deceleration of the world economy at large.

Meanwhile, the experts pinned hope on such emerging economies as China and India, estimating that these economies would maintain a relatively fast growth.

In the shadow of the US credit crunch, Brazil recorded a GDP growth of 5.8 percent in the first quarter of this year, Russia, 8. 5 percent, India, 8.8 percent, and China, 10.6 percent.

"Emerging economies are able to seek advantages and avoid disadvantages through enhancing trade between themselves and stimulating their domestic demand," said Li Wei'an, president of the business school of the Tianjin-based Nankai University.

The emerging markets' strong growth would help the world economy at large to achieve a soft landing, Li believed.

As the world's largest developing nation, China was challenged by heavy snow and sleet storms, a major devastating earthquake, and a complex and changing situation both at home and abroad this year. But it managed to maintain an economic growth of 10.4 percent in the first six months.

Some participants of the 2008 Summer Davos meeting agreed that the Chinese economy would be affected adversely by ebbing demand from the United States. However, they said, it would keep growing on the basis of policy shifts and efforts to expand domestic demand.

Premier Wen Jiabao said at the opening ceremony of the Tianjin meeting on Saturday afternoon that China did "face considerable difficulties." "However, all these are difficulties that have occurred in the course of development."

"In short, the economic fundamentals in China remain unchanged and the economy is moving in the direction envisaged in the macro- economic control policy," he observed.

Though emerging economies have seen their export affected by the US economic slowdown, their domestic infrastructure still has much room for improvement, which could be translated into huge development potentials.

According to Premier Wen, China is in the stage of accelerated industrialization and urbanization, during which the potentials are huge for domestic demand and consumption to expand. He noted there are many favorable conditions for ensuring a sustained, rapid growth of the Chinese economy.

Wen's view was echoed by James H. Quigley, global CEO of another world prestigious accountant firm Deloitte, who said that Asian economies, particularly the Chinese economy, would continue to grow.

They not only relied on export, but also boasted enormous potentials in infrastructure construction. And they would expand consumers' markets, said Quigley.

He added that the huge development potentials in the emerging economy would "play an active role in the world economy at large."

Professor Klaus Schwab, founder and executive chairman of the World Economic Forum, has kept observing the world economic pattern in an acute manner.

He said that affected by the current financial woes, the world economy would likely slow down in the coming two or three years, but China would become one of the economies that achieve the fastest growth around the world.

He even believed that China would evolve into a dominant force on the world economic stage.

Over the past 30 years, when the world economy grew at an average annual pace of 3.3 percent, China maintained a growth of 9. 67 percent on annual average.

By 2007, China's GDP accounted for five percent of the world's total, up from the one percent in 1978. The nation's share in global trade also jumped from less than one percent to roughly eight percent in the three decades.