Developing nations need shift to balanced growth
Updated: 2013-09-13 02:35
By Qiu Quanlin (China Daily)
Developing and transitional economies need to move toward more balanced growth and emphasize domestic demand, a report by the United Nations Conference on Trade and Development said.
The Trade and Development Report 2013, which was released in Xiamen, Fujian province, during the annual China International Fair for Investment and Trade, said a prolonged period of slow growth in developed countries will mean continued sluggish growth in their imports.
A shopper selects products at an imported goods shelf at a supermarket in Yichang, Hubei province. Liu junfeng /for China Daily
"Developing and transitional economies need to reconsider development strategies that have been overly dependent on exports. Instead, they should give greater weight to domestic demand," said Li Yuefen, head of the debt and development finance branch of UNCTAD.
Getting on a more balanced growth path could, on a sustained basis, compensate for the adverse effects of slower-growing exports to developed countries, according to the report.
Citing China's huge domestic market potential, Eric Dahl, chief executive officer of the World Trade Centers Association, which represents more than 300 world trade centers in 100 countries, said developing countries should shift their strategies from simply relying on developed markets to a more balanced trade path.
Dahl said China's vast domestic demand provided a new market when overseas markets were hard hit by the global economic downturn that began in 2008.
The United States is buying less from China, he said. That's due to a combination of reduced demand and a more cost-effective and competitive domestic supply structure, which has made it difficult for Chinese companies to export as much as previously, he said.
In an interview with China Daily during the CIFIT, which concluded on Wednesday, Dahl said massive domestic demand in China will help offset the global decline in sales for Chinese exporters.
"Luckily, China has unlimited demand in its domestic market, and it can refocus on the domestic market, which is of great importance to help drive the country's economic development," he said.
China has many challenges in the environmental and social sectors after its "miracle development" of the past three decades, but the outlook for the country's economic development remains strong, according to Dahl.
"Investment and reform are critical, which will make China able to maintain a strong economic performance in the future," Dahl said.
China's economy has shown signs of stabilization in recent months after a growth slowdown, signaled by larger-than-expected rebounds in trade and economic statistics showing manufacturing regaining momentum. Dahl added that investing abroad will help China achieve sustainable gains in the global market.
"As far as you want to be successful in the US in the long term, I think that a secret there is to establish manufacturing in North America. Not from China, but from Mexico and the southern US, where you can buy cheap land, transfer your technology and start serving the North American market from there," he said.
Dahl said Chinese industries need to develop their capability in sales, marketing and branding, areas in which they're not strong.