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Saturday, July 7, 2007

Chinese growth sustainable, Wang says

Urban-rural wealth gap, energy efficiency still key issues: ambassador


Staff writer

Economists and investors around the world are keenly watching China for signs that its economy will overheat and sputter, slowing the global economy.

News photo
Wang Yi, China's Ambassador to Japan, speaks at Aoyama Gakuin in Tokyo. YOSHIAKI MIURA PHOTO

Many China watchers doubt Beijing can maintain its current rapid growth beyond the 2008 Beijing Olympics or the Shanghai International Exposition in 2010. The most cynical are bracing for the worst.

But Chinese Ambassador to Japan Wang Yi is trying to dispel such gloom. He says China's expansion will last well beyond the Shanghai expo.

"China still has a much longer outlook for economic development," Wang said at a lecture earlier this weak at Aoyama Gakuin University. Wang, appointed in September 2004, is considered one of the government's leading Japan experts and delivered his lecture in fluent Japanese.

China has sustained greater than 9 percent annual growth on average over the past 30 years. But it now faces an inflated real estate market and mounting nonperforming loans at state-backed banks.

Wang stressed that despite that sharp economic expansion, Chinese labor remains cheap and quality is improving. He also said average wages are still one-20th of Japan's in a country where a population of 1.3 billion sees 5 million new graduates flood the job market every year.

"Combining these two factors, the Chinese economy will be able to keep growing further," the ambassador said.

All the same, Wang acknowledged that Beijing must bridge the staggering gap in prosperity between wealthier urban areas and the 800 million impoverished peasants living in rural backwaters.

"That's the biggest and most fundamental issue. The (large) market will be realized only after we solve problems in rural villages and increase their purchasing power," he said.

To narrow the gap with urban areas, the government has concentrated infrastructure investment in rural areas and exempted 150 million children from paying school fees, Wang said.

Making industry more energy-efficient also remains a challenge, Wang said, pointing out that Chinese industry — which is heavily dependent on infrastructure investment and inefficient coal plants — consumes too much energy.

That trend is not sustainable, because it will cause energy problems not only in China, but across Asia as a whole and in other parts of the world as well, he said, adding, "We need to change this."

In that sense, China is trying to follow in the footsteps of Japan, Wang said. Japan boasts relatively clean, energy-efficient industries that took form after the country overcame serious pollution problems in the 1950s and '60s and adjusted to the oil crises of the 1970s.

"We'd like to learn much from the experiences of Japan," Wang said.



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