Photo taken on July 5, 2018 shows a ship of PULNG project at Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in east China's Shanghai. This year marks the 40th anniversary of China's reform and opening-up policy. (Xinhua/Shen Bohan)
NEW YORK, Jan. 22 (Xinhua) -- China's continuous efforts to deepen reforms should be the best strategy while aiming for sustained growth amid the gloomy global growth outlook, a renowned U.S. economist has said.
Stephen Roach, senior fellow at Yale University's Jackson Institute for Global Affairs, told Xinhua via an email interview on Monday that personal income growth underpinned by employment and wage earnings, corporate profits as the key determinant of business investment, and the state of global economic activity as the key determinant of external demand and exports are among the important metrics to gauge the growth momentum of an economy.
"From the standpoints of these factors, resilient employment and wages are encouraging, as are ongoing stability in corporate earnings; however, the greatest source of potential weakness for China is concentrated in the emerging deterioration in global demand," said Roach, who is also the former chairman of Morgan Stanley Asia.
"For China, the best strategy has long been centered on reforms. It will be important to avoid backtracking on existing reforms and repeating the mistakes of others," he added.
The longtime China watcher noted that China's ongoing efforts at deleveraging, excess-capacity shedding, market-oriented state-owned enterprise reforms and China's recent move to widen market access for foreign investment are in the right direction in fostering a more competitive economy.
The world's second-largest economy grew by 6.6 percent year-on-year to reach 90.0309 trillion yuan (about 13.28 trillion U.S. dollars) in 2018, data from the National Bureau of Statistics (NBS) showed Monday.
Commenting on China's economic performance in 2018, the ex-Morgan Stanley senior executive stressed that it would be important to look behind the headline gross domestic product (GDP) report and examine carefully the components of the gain -- especially the split between tertiary and secondary activity in order to assess China's ongoing progress in structural rebalancing.
"I remain fundamentally optimistic on China's economic prospects," said Roach, adding that his optimism will be vindicated as the country is pressing ahead with further reforms by seizing the key moment.
The NBS's data also showed consumption played an increasingly bigger role in the economy, contributing 76.2 percent of GDP growth, up significantly 18.6 percentage points from a year ago, and from the perspective of industrial structure, the tertiary industry accounted for 52.2 percent of the total.
Like many other economists, Roach also highlighted China's significant role in maintaining world economic stability.
"China accounted for approximately 30 percent of the cumulative growth in world GDP since 2010; absent this support, there is a very good chance that the world would have lapsed back into renewed global recession in the aftermath of the financial crisis," he said.