China's extensive reforms benefit whole world

LONDON - China is carrying out more reforms than all the other countries in the world put together, and China's success over the past decades and its current reforms are benefiting the world in different ways, a British researcher has said.

Jan Dehn, research director of Ashmore Group, a Britain-based asset management company, told Xinhua in a recent interview that he is very positive about China's reform stories and its economic outlook.

Most successful

"China has emerged over the last 25 years as the world's most successful export-led economy. The world has never seen such a successful export-led economy," said Dehn.

"It grows so fast, has become so powerful in such a short time, and it is even performing better than Japan. And also it is bound to get much bigger, when you look at Chinese population ... its economy will be five times bigger because its population is five times bigger than the United States," he said.

"China's economy is going to be by far the largest economy in the world, and by far the most important and dominant economy in the world," he stressed.

Three core components that have driven China's economic success are cheap labor, debt-fueled consumption of the Western countries, as well as a competitive exchange rate, said Dehn.

Though the export-investment growth model is extremely successful, these three premises or basic ingredients of growth model have become problems for China, as the country's wages are growing and the debt-fueled boom in the West is over, he noted.

The entire Western world has started to do quantitative easing monetary policies, which will eventually become inflationary and lead to the weakening of these countries' currencies, and China's currency is consequently likely to go up, he noted.

Dehn said that China has to change its growth model and has been also dedicated to this change, adding that's why his fundamental view on China is very positive, because he actually thinks Chinese policy makers are looking at a much longer term than most of the policy makers in the world.

"I think they also understand that there are only one or two alternatives to that export-led growth model, and that is domestic demand-led growth model," noted Dehn.

Challenges and solutions

China faces two particular challenges in this transforming period - liberalization or openness of capital account and flexibility of the currency, Dehn said.