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China the most powerful engine for global economy

Updated: Jan 5,2017 8:38 PM Information Daily

China’s contribution to the growth of the global economy has been leading other economies since 2009, and it has become the most powerful engine driving the global economy, according to Wu Qi, from the commercial bank research center at the research institute of Hengfeng Bank.

Data from the International Monetary Fund also showed that China contributed 1.2 percentage points to the global economy in 2016, while the United States contributed 0.3 percentage points and Europe 0.2 percentage points, the website of German radio station Deutschlandradio reported.

The website said China’s 6.7 percent growth rate was twice the number of the United States, whose growth rate was only 3.2 percent in the third quarter, the highest in two years.

It also reported that if the United States stops growing, the global economy could still grow 2.8 percent, but if China stops growing, the global economy would become sluggish, and could grow only 1.9 percent, which does not take into account China’s indirect influence on other economies.

China’s increasing domestic demand has clearly helped the economic growth of other countries, and provided them with huge market demands and development spaces, said Wu.

China’s increasing outbound investment also supported the growth of many countries. From January to November in 2016, the accumulated investment volume was 1.07 trillion yuan, a year-on-year increase of 55.3 percent.

Although China’s total GDP was only 63 percent of the United States in 2015, it still has been the most powerful engine for the global economy for years, as its growth not only drove the domestic market, but also boosted the economies of other countries, said Gao Yuwei, a researcher at the international financial research institute of Bank of China.

In the last five years, the value of China’s imported commodities was nearly $9 trillion, which greatly boosted the development of related countries, added Gao.

With supply-side reform, cultivation of new engines and new business models, China will be more active in improving quality and efficiency to contribute more to the global economy, said Liu Jinshan, deputy dean of the School of Economy at Jinan University.