By Liu Zhiqin, senior fellow of Chongyang Institute for Financial Studies of Renmin University of China (RDCY).Source:CCTV website.

Despite many concerns about the future of world economic development in 2015, The Davos World Economic Forum will try to give more confidence to the world, and China as usual is becoming more important factor in the recovery of the global economy.

Chinese Premier Li Keqiang shows some more positive signals to the world that China is still the main driving force to help world recovery, but China does not like to be a "lone hero" that contributed 27.8% to the global GDP in 2014, the world economic development needs "unified, joint efforts of the world community", thus more "heroes" needed to collaborate with China.

At least one signal to the world is very impressing that although GDP in China in 2014 has only reached 7.4%, instead of 7.5%. It is not a negative factor, because China’s ODI in 2014 has sharply increased by 14.1%, up to 102.9 billion USD. The importance of this figure is very clear to tell the world that China will invest more in outside countries which will improve the living standard and enhance the employment of these countries. Especially in USA, the investment from China increased by 23.9%, and meanwhile increases 1.7 times to EU countries.

So there is no reason to worry about China, because the stable and sustainable growth of China will be the core interest in the years ahead.

China will certainly have its own challenges in the path of growth, the most key issue is how to put the local government debt under strict supervision and control, RMB internationalization and exchange rate reform has become one of the priorities of the central government.

Except for those economic issues in Davos, the people all over the world will know and understand China with 3-Rs from the performance of China in Davos.

1.First, "Responsible". China has already become “a responsible country” as many westerners expected. In recent years, we often heard the words from politicians and leaders of western countries telling China “to be a responsible country”; a few politicians in West are always trying to “teach” China to act, to behavior, to perform as a “responsible country” which dropped a hint that China had never been acting as “a responsible country”. This is really a colossal unfair and unjust treatment to China.

During the Brisbane G20 Summit, President Xi Jinping said that China had done its utmost to help the global economy in the past 6 years and every year contributed 36% of world total GDP to the recovery of the world development. We can’t image what the world economy would become if there is no development and investment from China. China declared again in the summit that China would continue to contribute its decisive role to the refreshment of global recovery. This testified that China is a “real responsible country” in the world.

2.Second: “Reliable”. China is not only a “responsible country” but also a “reliable country”. At the time of today, “reliable” is becoming more important to handle the trade and financial issues. During the recovery process of the world economy, many economics have suffered a lot from crises and social chaos. Most of the countries could not find a right way out of the financial smog.

But China stands up boldly and bear the most of the burdens to fight the global economic sluggish pace and stagnation and leads the whole world to a right direction toward the recovery. A friend of mine in a European bank told me that “China undertakes its obligation to bring the ‘blind’ global economy out of bush and jungle, China is a reliable and trustful friend indeed as in need. ” China is not an oral “reliable”, but an action-taken partner.   

3.Third: “Re-innovative”. China has become an important re-innovative country with millions of talented people. Most of the people believe that the 21th century is the time of innovation which is the key-driving factor for a sustainable recovery. The world placed its hope on the “innovation”. And China will invest billions of USD to stimulate the innovation to be a decisive force in developing economy.

The former US Secretary of State Hillary Clinton said that both China and USA should “cross a river in the same boat”. China has undertaken its promise and commitments by helping the world to get rid of the shadows of economic slowdown.

So far as for China, we have no time, and even have no reason to enjoy the praises and flowers from the world, we must be vigilant that China is facing a very serious challenge in the time to come. We must be aware that the momentum of our economy is suffering some heavier setbacks which would produce negative output to the development of economy. China has a lot to do to deal with the downward pressure in the next 3 years.

The most important factor for the world and EU is to change present “passive growth into active growth.” The so-called “passive growth and active growth” have total different interpretation and consequences. The “passive growth” showed to outside world that our ability is far from enough to realize the ambition and reluctant to fulfill the growth target. But on the contrary, “active growth” relies on self-improvement mechanism leading to economic recovery. “Active growth” means to realize the goal with less-than-full efforts. The two different forms of growth have certainly different policies governing each sector. “The passive growth” policy covers mainly fiscal austerity, tax-increasing and cutting or reducing social insurance which all means to rob and snatch wealth from society. These “passive policies” have been already implemented in most of developed countries but with no successful results till today, its negative impact will exist for a longer period.

The whole world should follow the “active policy” for “active growth” which insists on restarting the engine of development by refueling more initiatives to reform and restructuring of low-profit and low-output of industries. These policies might be seen as encouraging reasonable fiscal expenses, encouraging consumption by subsidies, and sharply cut the tax pressures to relieve normal consumers and SMEs. The key factor of “active policy” should be focused on tax-relaxing measures that will provide strong dynamics to benefit all partners in economic circles.

However the Davos WEF will find out solutions at least will release more optimistic messages to the world: China will be firm to its goal of further reform and make its economy stronger and contribute more to the globalization.

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