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China has been engaged in enormous domestic economic transformation and Chinese leaders are doing pretty well on this, said former Australian Prime Minister Kevin Rudd.
Leaders in China chose not to artificially inflate the growth rate when the transformation resulted in reduced growth rates as predicted, Rudd told Xinhua in an event held here to mark his arrival as the president of the newly established Asia Society Policy Institute.
"The reduced growth rates" refers to the Chinese GDP growth rate of 7.4 percent in 2014 on a yearly basis, a record low since 1990, which spurred overseas concerns about the economic development of the world's second largest economy.
China is going through a very deep transformation to move an economy from one that is based on labor-intensive manufacturing for export to one that is based on innovation, the services sector, urbanization and private consumption, said Rudd, who served twice as Australia's prime minister and led the country through the 2008 global financial crisis.
Rudd's words echoed what Chinese Premier Li Keqiang said when attending the World Economic Forum annual meeting in Davos, Switzerland in January. The Chinese economy has "entered a state of new normal," Li noted, saying that growth is shifting from a high speed to a medium-to-high speed, and development needs to move from low-to-medium level to medium-to-high level.
The Chinese government has created a blueprint to change the old economic model to a new one, Rudd said, there will be lots of bumps in the road, but I think China's economic transformation is heading to the right direction.
The transformation is harder for China in the face of global markets "in a state of not just softness, but in fact effective recession and deflation," added Rudd.
He took Europe as an example, saying Europe has historically been a strong market for China and sustained China's economic performance in terms of manufacturing, but the region's economy has been flat and negative for the last seven to eight years.
Instead of the traditional ways to stimulate the economy, the Chinese government has chosen to go to the harder road of enduring the transformation, Rudd added.
"The Chinese economy is fundamental to China's role in the region and the world, and it's also fundamental to the well-being of Chinese people," he said. Enditem
