China well-positioned to achieve steady growth: economist

2017-08-13
Xinhua

BEIJING — China is well-positioned to achieve steady economic growth thanks to the development of the Belt and Road Initiative, according to a senior US economist.

“The Chinese economy has experienced a slowdown, but the worst is over now and the Belt and Road Initiative will help prevent it from being worse,” Pippa Malmgren, president and founder of DRPM Group, told Xinhua.

The B&R Initiative helps China build links to the rest of the world and create GDP outside the country through increased exports and overseas investment, according to Malmgren, who once served as advisor to former US President George W. Bush for economic policy and financial markets.

Malmgren pointed out that it is important to observe qualitative signals in daily life that indicate economic trends in addition to quantitative indicators like GDP and CPI.

Malmgren is author of Signals: How Everyday Signs Can Help Us Navigate the World’s Turbulent Economy.

Understanding economic signals and taking actions accordingly will help avoid the appearance of “Black Swans” and “Grey Rhinos,” which may appear due to ignorance of certain trends, she added.

Malmgren observed that the global economy is facing rising inflation as people have to pay the same price for increasingly smaller products, and the solution to the challenge is innovation.

“We are already in the fourth industrialization, featuring artificial intelligence and other new technologies. Innovation will create new forms of growth and kill inflation by lowering costs and prices,” she said.

One good way to digest the large pool of money injected into the global market is to invest in the real economy instead of the financial sector, which is what the Chinese government is doing, she said.

“An engineering graduate now can enjoy a higher salary than a finance graduate in the United States. This is one good signal for the real economy,” she said.