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U.S. signals hope for economic recovery (2) |
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16:27, September 04, 2009 |
Reform and innovation will decide the future of American economy. The Obama administration deems the R&D, education, the qualified personnel and reform as vital means to boost economy. To date, Total Factor Productivity (TFP) growth in the U.S. is sound, and it suggests that a long-term growth trend of U.S. economy is still good. In American history, TFP has contributed tremendously to the U.S. economic growth and competitive advantages. In the post-financial crisis days, the U.S. will lean to or rely on the science advances and global technologies procurement systems, and the qualified personnel and institutional advantages are still in the hands of the U.S.
U.S. economy has undergone subtle changes, with a declining trend in consumption and a rising trend with its growing reliance on other countries, so as to help hasten the process of multilateral economic growth. The present round of economic growth depends more on gains in overseas markets, rather than on individual consumption, whose GDP ratio would possibly decline.
With regard to development situation, subtle changes in the U.S. economy would undoubtedly reduce its contributions to global economy, and hence negatively affect the global economic growth.
China's Q1 GDP growth propped up the global economic growth for the first quarter of 2009, noted the relevant statistics and, for the second Quarter, a 1.6 percent GDP growth was forecast worldwide and the global economic growth would be zero in the second quarter if China's GDP growth in the quarter is deducted or written off.
Emerging markets economies and developing countries have pulled up global economic growth in 2009, and China has contributed half of it. In the next few years, predicts the International Monetary Fund (IMF), new-emerging market economies would account for more than 70 percent of the world economic growth.
U.S. economy remains an engine of world economy and other countries would find it difficult to "de-link" with U.S. economy in the post-crisis era. So, the U.S. economic structural reform and slowdown in potential growth rate will, beyond any doubt, negatively affect the world trade and capital flow, and slowdown world economic growth.
Meanwhile, the global environment for inter-bank lending tends to be intense, trade protectionism will run wild and be more rampant and economic and trade frictions among big powers would increase. Therefore, the export-oriented economies in Asia and other regions of the world cannot be overlooked.
By People's Daily Online and contributed by Chen Fengying, a senior researcher with the China Institute of Contemporary International Relations, as well as the director of its Institute of World Economic Studies
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