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Home > About China
Beware extolling China to danger with world-level "responsibilities"
2010/08/24

BEIJING, Aug. 17 (Xinhua) -- Some western countries have been throwing out various "China responsibility" theories after the global financial crisis. These responsibilities form a system that seem to grant China a responsibility to save the world.

"Responsibility of a trade surplus economy," "responsibility of a creditor country," "responsibility for the foreign exchange rate," "responsibility of savings," "responsibility of a major energy consumption country," "responsibility of a major carbon dioxide emissions country," are among the many responsibilities that are being talked about China.

Whatever be the tone, it carries the same unreasonable logic. China is the country they point their finger at once the global economy goes wrong, and yet China is the one country they turn to for shouldering international obligations. It seems that the global economy depends on what attitudes China employs or what policies China follows.

These theories are fabricated on purpose by some western countries.

They have been exaggerating China's strengths and influences in a bid to let China shoulder more "world-level obligations and responsibilities" and also make China increase its "contributions" to tackle the global economic downturn. The objective is to slow down and check China's development.

These exaggerations include: overstating the effects of China's 2 trillion U.S. dollar foreign reserves, overstating China's influences on the global economy, especially the claim that China's increasing demand leads to increase in the prices of international commodities, while shying away from the abuse of financial vehicles and speculation in the markets.

Some western countries are also exaggerating China's position as the world's largest greenhouse gas producer and are asking it to shoulder obligatory requirements of emission cuts; at the same time these countries don't want China to enjoy preferential treatments available to developing countries. They believe that China's demand for "common but differentiated responsibilities" is an attempt to shed responsibility.

ABSURD "RESPONSIBILITY OF SAVINGS, TRADE SURPLUSES"

It's absurd to ascribe the main reason for the global financial crisis and the global economic imbalances to the high savings and trade surpluses in China and other countries.

The core reason for the global financial crisis is the defects of the U.S. economic system, the loopholes in the international financial system, and the lack of supervision. The U.S. economic policies have been focusing too much on its domestic problems and "neglected" the responsibility of the U.S. dollar as the top international reserve currency in the global economic downturn.

The low savings and high trade deficit in the United States is a result of its long-term policy choices and consumption habits, and not as a consequence of China's high savings and trade surplus. There is an obvious time lag between China's high trade surplus and the U.S. low savings, indicating the two have no cause and effect relation.

The United States had built its high consumption habit long before China accumulated huge foreign exchange reserves. The latest round of declining American saving rates began in 1984, and dropped to 2 percent in 1999, maintaining the low rate for six years. The figure further dropped below 1 percent from 2005 to 2007.

The trade deficits in the United States started in the early 1980s and have lasted for almost 30 years. At the same time, deficits were constantly reported in government revenue and expenditures, except during the Bill Clinton government's latter years. These are not new things that have occurred in recent years.

It's a fact that China's foreign reserves have been expanding since 2003. Obviously, it's groundless to say that China's high trade surplus has contributed to high consumption in the United States. The expansion of the United States' domestic policies had spurred individual consumption growth and expansion of public spending, and this led to decreasing individual and government savings.

Another reason is that the United States sets various export obstacles while importing huge consumption products to satisfy domestic demand. These obstacles are made to prevent domestic high-tech products from being exported to developing countries like China.

These two factors have resulted in decreasing saving rates and shrinking trade surpluses in the United States.

Though the global economic downturn was caused by the sub-prime crisis in the United States, the core issue is the defects in the U.S. economic system and neo-liberalism in economic policies that made the United States accumulate up to 10 trillion U.S. dollars of trade deficit, financial deficit and individual credit deficit.

Yu Zuyao, an economist with the Chinese Academy of Social Sciences (CASS), said, "There is need not only to strengthen financial monitoring in the United States, but also to change the U.S. neo-liberal system."

Neo-liberalism is a market-driven approach to economic and social policy.

Zhang Jianhua, head of the Research Bureau of the People's Bank of China (PBOC), said the "trade surplus responsibility" theory is a plea for some western countries to map out trade protectionism, and put more pressure on China but to take no responsibility for economic policy misconducts and insufficient monitoring.

IRRESPONSIBLE "CREDITOR COUNTRY RESPONSIBILITY"

Ba Shusong, a researcher with the Finance Research Institute of the Development Research Center of the State Council, said the status of a mature creditor country should have two conditions: one is continuous economic growth and trade surplus and another is influences in proportion to its credit amount in the international monetary system.

The status of a new creditor country to China is a natural result of its economic growth, but the creditor country status is too early, as the Chinese currency yuan is weak in the International Monetary Fund and the international monetary system.

It's a paradox that a developing country, which is still fighting to eradicate poverty, has to lend low-interest money to developed countries including the United States, he said, and added this indicates that China's creditor country status is exaggerated in the imbalanced international monetary system.

The yuan appreciated 21.1 percent against the U.S. dollar from 2005 to 2008, while the U.S. trade deficit against China expanded 21.6 percent - the largest ever in history. The exchange rate of yuan against the dollar was relatively stable in 2009, but the U.S. trade deficit dropped 16.1 percent.

"It shows that the deciding factor in trade is the demand-supply relationship instead of the exchange rate," said He Weiwen, director of the China-U.S. Economic and Trade Research Center at the University of International Business and Economics.

Cao Honghui, a CASS researcher, said exports from China are not the reason for the high jobless rate in the United States. On the contrary, the public in the United States has benefited a lot from the high quality and low priced Chinese products, while China's exports produced remarkable jobs in American companies engaged in trade with China, he pointed out.

The United States has been pressing the yuan to appreciate, and it is, in fact, manipulating exchange rates in a covert way as it aims to divert domestic discontent on sluggish economic recovery and high jobless rate, Cao said.

Harping on the topic of yuan appreciation is also related to the impending U.S. mid-term elections. It could be ascribed to political reasons more than economic reasons.

MISLEADING "ENERGY CONSUMPTION COUNTRY RESPONSIBILITY"

China's National Energy Administration and National Bureau of Statistics clarified on Aug. 11 that China's total energy consumption was 200 million tonnes of oil less than the United States, and its average per capita consumption was one fifth of the United States.

The clarification came after the International Energy Agency issued a report on July 19 claiming that China overtook the United States as the world's largest energy consumer in 2009.

"China has 1.3 billion people in 2009, while the population in the United States is 300 million. The per capita energy consumption in the United States is almost five times of that in China. High-consumption goods that could be produced in the United States have been transferred to China due to global industry transfer. The per capita daily life energy consumption of the Americans is far more than that of the Chinese. It could be judged from the American lifestyle," said Wang Zhen, head of Business Administration College of China University of Petroleum.

As a developing country, China has the right to improve people's living standards. It is groundless for any international institution or developed countries to blame China using only the overall figure.

"As the most populous developing country, China should not be blamed even if it turns into the largest energy consumption country along with its efforts to promote people's living standards and economic growth," Wang said.

"On one hand, China is relying on its domestic energy supply, and on the other hand, the country is promoting energy savings and emission cuts to improve energy efficiency," he said.

China has contributed significantly to global energy safety.

China has been active in developing new energies and ranks first in four fields: hydro-power installation, application of solar water heaters, nuclear power installations under construction and the growth rate of wind power installations.

SUPERFICIAL "MAJOR EMISSION COUNTRY RESPONSIBILITY"

China's emission of carbon dioxide from burning fossil energies was 4.6 tonnes per capita in 2007, almost one quarter of that in the United States, and about half of the emission by the European Union countries.

Judging by the overall emissions, as a country, China is the world's largest emission country.

China has been working hard to cut carbon dioxide emissions.

The global carbon dioxide emission rate dropped 15.4 percent on average from 1990 to 2007, the emissions in the United States fell 27 percent, that in the developed countries dropped 22 percent and in the developing countries was down 10.2 percent.

But emissions in China were down 49.2 percent from 1990 to 2007.

China has made emission reduction promises far beyond the obligations of developing countries.

It has promised that China will cut carbon dioxide per unit GDP by 40 to 45 percent in 2020 from 2005 - a highly intensive cut in 15 years that no developed country ever achieved in industrialization, said Pan Jiahua, director of the CASS Research Center for Urban Development and Environment.

The claim is groundless that "China destroyed the Copenhagen UN climate change conference" and "China was the largest obstacle for the world to take actions against climate changes".

"It was the developed countries that had impeded the progress of the Copenhagen conference. The emission cut targets made by the developed countries can't meet the aim to control global temperature rise within two Celsius degrees in 2020," Pan said.

"They also made discounts by changing basis year and using forest carbon sink and overseas emission cut. They went against the Bali road map by imposing high requirements on developing countries. They are not willing to take obligations from the Bali road map in terms of funds," Pan said.

The misunderstanding on China came from the fact that many developing countries oppose some contents in the Copenhagen agreement such as, for instance, global greenhouse gas emissions should be reduced 50 percent by 2050 from the current level, and down 80 percent in developed countries, Pan said.

"Currently the developed countries contribute to about half of the greenhouse gas emissions. The per capita carbon dioxide emission is 15 tonnes in developed countries, 20 tonnes in the United States and 2.5 tonnes in developing countries," Pan said.

"If the developed countries cut emission by 80 percent, their per capita emission will be three tonnes in 2050, and four tonnes in the United States. The developing countries thus have to cut emissions by 20 percent. Namely, they will have only two tonnes of emission in 2050," Pan said.

"It indicates that the developing countries were deprived of their emission rights. China's per capita emission is relatively higher than that of other developing countries, and thus it needs even more drastic cuts to meet the target, and its emission demands can not be ensured. China and other developing countries are defending for their development rights," Pan said.

In fact, the "China responsibility" theories reflect an overestimation of China's strengths. They noticed China's changes in the past 30 years were faster than other countries, but they did not fully realize that China has the world's largest population.

They further overstated China's ranking as the third or second largest economy and its largest exports, but ignored the fact that China's GDP per capita ranked in the lower level, and the fact that China is still a developing country.

"China economic responsibility theories" is kind of "puffing it to death" that should be guarded against, and China should not be influenced by outside noises to shoulder responsibilities beyond its capacities and to the peril of its interests, said Huo Jianguo, head of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

China should be responsible for its own people and the country's interests first, as is the largest responsibility China should take for the global economy and the peoples across the world.

Only on this foundation, can China shoulder more international responsibilities in proportion to its capacities to promote a more fair global economic order, boost a new growth mode of mutual cooperation and benefits and contribute more to the future of the global economy.

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