China has long been the engine of the world economy. But in a time of global depression, the country's growth rate has cooled down compared with the sizzling double-digit growth the country enjoyed for much of the past three decades. China's current economic figures have garnered a lot of attention recently.
Is a slower growth good or bad for China and the world economy? How to see China's current GDP growth rate, and what is the real meaning behind the GDP figure?
Paola Subacchi, Director of International Economics Research at Chatham House (also known as the Royal Institute of International Affairs), one of the world's leading independent think tanks, recently shared with me her takes on these issues.
"I don't think it's a particular problem," said Subacchi when referring to China's economic slowdown. "Because the slowing, you know, they remove some of the overheating which was a problem in the past."
"So it's not as serious as that. It's actually the right thing."
China's economic slowdown comes at a time when the country is transitioning its economic model, diminishing its reliance on manufacturing for export and government investment in core industries while boosting domestic consumption as a new driver of the economy.
"I think the problem is more of how you deal with these growth numbers," Subacchi said. "I mean, basically, the thing is, if China manages to reengineer its growth model, this is really a good thing."
"So, the growth number itself, the pace of economic expansion is just the number, but the real meaning is what is behind of this number. And in my view, its norm is raised, because China is now moving towards the next stage of development."
Subacchi's views were echoed by Steven Roach, the former chairman of Morgan Stanley Asia and a current senior fellow at Yale University.
"China is changing its stripes. It is rebalancing away from a model that is probably not the most sustainable model for the long haul to one that is better balanced. And I think that's a very important development that should be talked about," said Roach.
"The problem is we are addicted to 10 percent growth in the United States and in Europe, because China is pretty much the only source of growth in the global economy."
At its current stage of development, decades of double-digit growth have become unsustainable for China. It is not only the rate of growth that matters, but also the quality of growth. The current growth rate is slower, but more sustainable over the medium and long term. A China that grows at a slower, but more sustainable pace will be positive for the global economy.
(This is a reprint from the People's Daily Online of the August 22, 2013 edition.)