China can help world with infrastructure experience and investment: economist
Updated: 2015-02-06 13:13
CANBERRA - With its rich experience in infrastructure building and its financial resources, China is able to establish global capabilities that will help satisfy demand for infrastructure, Hans Hendrischke, an expert on Chinese economy told Xinhua in a recent interview.
Professor Hendrischke of University of Sydyney, who had stayed in China for many years as a diplomat and academic, said that China has accumulated vast experience in infrastructure building and has economy of scale that other economies cannot easily match.
By combining these technical resources with its financial resources, China is able to help out in both developing countries and developed ones, he said.
"In developing countries China can help overcoming shortages in finance; in developed countries China can help lower costs in infrastructure building."
"China's proposal of an Asian Infrastructure Investment Bank ( AIIB) is one example of a regional initiative that will establish China's reputation as a responsible global leader in technologies, finance and open governance," he said.
Over 30 years since China adopted reform and opening-up policies, the country has maintained fast economic growth. However, the government has slowed the pace of economic development to accommodate reforms that would go broader and deeper.
"The risks with China's economic transformation are becoming more complex as China is developing into a globalized market economy," he said.
"China is facing external and domestic economic risks," he said, "External risks relate to a downturn of the global economy that could endanger China's exports. The domestic risks relate to China 's economic transformation and upgrading."
Despite the New Normal of slower economic growth, China is for sure to bring new benefits to the world, especially in the service sector, in its economic transformation.
"China's economic transformation has already brought benefits to China's trading partners in form of cheaper manufactured products. China's manufactured products have helped raising living standards in other countries," said Hendrischke.
"The next step will be Chinese contributions to global services, including finance, IT, commercial services and entertainment. China could become a global player in services as well as in manufacturing. This will require liberalization of Chinese service industries, including cultural industries."
Hendrischke said China's globalization is still at its early stages. Despite being the most important trading partner for many countries, China will see its contribution to an inclusive and open global economy depending on its integration in global value chains and in other economies through its outbound investment.
He reassured Chinese investors that the hostilities they experienced in some countries are not unexpected to new players.
"China's outbound investment is a new development and China is facing the same problems that established foreign investors faced at different periods in history before. China needs to understand that this is a matter of time to resolve and that it is crucial that Chinese investors communicate with local stakeholders and are able to explain the benefits they bring to their host countries."
"Overall, Chinese overseas investment has been received very well," he said, "The better Chinese investors are able to cooperate with overseas partners, the better the opportunities for expanded Chinese investment."
"One big advantage of Chinese investors will be their ability to provide access to the Chinese domestic market for their foreign partners. The ability of Chinese investors to integrate their foreign partners into China's global value chains will be a sign of true globalization that creates common benefit."