Best China can do in crisis is to "run its own affairs well"

Special Report:Global Financial

Crisis

BEIJING, Oct. 24 (Chinese media) -- With industrialized

countries mired in the current financial woes, many are hanging on emerging

economies such as China in the hope of bolstering the teetering world economy.

Undoubtedly, China's steady growth can play a role in

fighting the crisis and the recovery of the global economy for the following

reasons.

China has been on a track of robust growth for years

to become the world's fourth largest economy, and the momentum is expected to

continue, though in an abated way.

Its financial sector is largely insulated from the

credit crunch due to limited exposure as a result of a relatively closed market.

With its huge 1.9 trillion U.S. dollar foreign

exchange reserves, China has strong capabilities to withstand risk and will be

able to assist other crisis-plagued countries crying for cash injections.

But the domestic economy could never get away from

the crisis unharmed in today's highly globalized world, though limited as for

its immediate exposure.

Chinese exporters, which fueled the country's growth

in past decades, had already felt the pinch of slackened external demand amid a

probable global recession, as reflected in the third quarter's 9 percent growth

-- its lowest increase in more than five years.

The crisis had caused difficulties and uncertainties

to the Chinese economy, and prompted the country's decision makers to stimulate

it with a series of moves.

It's true China's strong footing in the current

crisis would prevent many trading partners from further shocks, as the country

has grown into an important market for many nations.

But "Is China able to rescue the world?," as some

Western media ventured to ponder.

The bold proposition more mirrored desperation for

hope and support in a sweeping crisis than true faith in China's strength to

lead the world out of crisis. It was already rebutted by sensible Western

analysts.

The Wall Street Journal wrote on Oct. 21 "the

slowdown (of the Chinese economy) highlights ... how China has yet to achieve

the kind of scale needed to single-handedly drive the global economy."

The New York-based newspaper said China ranked only

100th in the world in terms of per-capita income, and actually accounted for 6

percent of the global economy at market-exchange rates, or about 10 percent

after adjusting for purchasing-power parity.

"(The Chinese economy) can be something of a driver,

but what happens in the other 90 percent is going to matter more," Nicholas

Lardy of the Peterson Institute of International Economics made crystal clear.

Chinese leaders were also dealing with the crisis in

a practical manner. They said several times the country's sound economic growth

was in itself a major contribution to global financial stability and economic

growth.

President Hu Jintao on Friday reiterated the stance

before leaders of 45 Asian and European nations and organizations who gathered

here at the opening ceremony of the Seventh Asia-Europe Meeting. "China must

first and foremost run its own affairs well," he stressed.

And the country is already on the move. Interest

rates were lowered twice over the past two months following the rate cuts by

other major central banks and in a coordinated global effort to stem the crisis;

tax rebates for certain exports were raised to help producers cope with smaller

profit margins.

The government also announced an array of policies,

including tax exemptions and mortgage deposit reductions, to boost the falling

real estate sector, and scrapped the stamp tax on share purchase to boost the

bearish stock market.

Such moves reflected the government's resolution and

confidence to achieve stable economic growth. "Confidence is even more precious

than gold or any currencies," Premier Wen Jiabao had emphasized repeatedly.

Thus, one thing is for sure: China is not only the

victim of the current global crisis, but will also be an active participant in

resolving it, as it did in withstanding the 1997 Asian financial meltdown.

But it's unrealistic either to deny the positive

China factor, or hope for too much from the country to deal with the crisis.