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ReturnChinese economy will encounter high costs and high risks
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admin
PublishDate：
2006-12-28 15:08:00
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507
Chinanews, Hong Kong, Dec. 28 – As China's transitional period for fulfilling WTO commitment has come to a close, China will encounter more trade disputes in future. Some economic consultants point out that China should actually pay more attention and be more alert to the growing costs and risks that will show up in future as part of the economic cycle. While the high costs and high risks will directly affect the sustainable development in Chinese economy in future, they will also be helpful for the economy to make the transition.
With China’s WTO five-year transitional period having now come to a close, China will fully open its economy in all fields and therefore, more trade disputes will occur. More important than this, some experts warn that as China’s economy continues to grow at a fast space and people’s income level has increased, key production factors and the situation in supply and demand will undergo big changes. As a result, economic advantages resulting from low costs will decrease. At the same time, as structural changes will take place in society, more fundamental conflicts will begin to show up. In addition, Chinese economy will meet with more frictions from other countries.
Wang Yiming, deputy director of the Macro Economy Research Institute under the State Development and Reform Commission, pointed out that the open-up has made Chinese economy grow rapidly. In the past, Chinese economy was, on the whole, developed in a mode that involved “l(fā)ow costs and low risks.” This was in line with the general economic rule. It is also the result of many other specific factors.
As the Chinese economy enters into a new cycle, labor resources, production costs, natural resources, and environmental protection will all add costs to the economy. The advantage resulting from low costs will diminish and economic costs will increase. At the same time, due to the enlarging income disparity and the widening gap between different interest groups in society, more frictions will occur. If not handled properly, these frictions will bring certain hidden conflicts to the surface. As more trade disputes occur and Chinese service industry further opens, China’s reliance on foreign resources will increase and therefore, China will be exposed to more external risks. In addition, China should make more efforts in environmental protection and improve its social security system and public service system, which will, no doubt, increase economic costs. All these are the inevitable costs that China has to pay in its endeavor for realizing a scientific development and building a harmonious society.
On the whole, the increase in economic costs is a long-term process. When China should pay enough attention to the rising costs, on the other hand the risks should not be over-exaggerated, Wang noted.
Source: Chinanews
With China’s WTO five-year transitional period having now come to a close, China will fully open its economy in all fields and therefore, more trade disputes will occur. More important than this, some experts warn that as China’s economy continues to grow at a fast space and people’s income level has increased, key production factors and the situation in supply and demand will undergo big changes. As a result, economic advantages resulting from low costs will decrease. At the same time, as structural changes will take place in society, more fundamental conflicts will begin to show up. In addition, Chinese economy will meet with more frictions from other countries.
Wang Yiming, deputy director of the Macro Economy Research Institute under the State Development and Reform Commission, pointed out that the open-up has made Chinese economy grow rapidly. In the past, Chinese economy was, on the whole, developed in a mode that involved “l(fā)ow costs and low risks.” This was in line with the general economic rule. It is also the result of many other specific factors.
As the Chinese economy enters into a new cycle, labor resources, production costs, natural resources, and environmental protection will all add costs to the economy. The advantage resulting from low costs will diminish and economic costs will increase. At the same time, due to the enlarging income disparity and the widening gap between different interest groups in society, more frictions will occur. If not handled properly, these frictions will bring certain hidden conflicts to the surface. As more trade disputes occur and Chinese service industry further opens, China’s reliance on foreign resources will increase and therefore, China will be exposed to more external risks. In addition, China should make more efforts in environmental protection and improve its social security system and public service system, which will, no doubt, increase economic costs. All these are the inevitable costs that China has to pay in its endeavor for realizing a scientific development and building a harmonious society.
On the whole, the increase in economic costs is a long-term process. When China should pay enough attention to the rising costs, on the other hand the risks should not be over-exaggerated, Wang noted.
Source: Chinanews
