The West is fundamentally misreading the risks around China, according to Li Daokui, one of the country’s leading economists.
Mr Daokui, formerly a policy-maker at China's central bank, said he does not worry “at all” about the economy’s slowdown from a once double-digit growth rate and is confident that GDP will expand “reasonably fast” during this decade.
“The reason I do not worry about GDP growth per se if the country is … still a very poor country,” he said, citing the GDP per capita measure, which is less than one fifth that of the US.
Mr Daokui, speaking at the 2013 World Economic Forum in Davos , also thought issues around China’s currency policies and its exporting might, long a sorce of tension with net importers such as the US, were lessening.
The long-term trend is for China’s trade surplus to decline, he said, while the country sees “a quiet revolution going on” as domestic demand rises, driven by consumers.
However, he was concerned as to how relationships with other countries will unfold, and the issues facing the world’s biggest economy, the US.
“I worry about the US,” he said. “In today’s world, I’m not so worried about Europe. Europe is fine, Europe has been working hard doing fiscal reforms, cutting expenditure. It’s the US that has not been doing major homework.
“So I do worry that as a second-termer, President Obama may not be able to solve economic and fiscal issues effectively.”
As a result, the US government may channel voters’ attention on to foreign countries, he suggested.
“China is [an] easy target,” he said. “I do hope the Americans and American government understand one thing. There is tremendous room to work with China.”
Mr Daokui predicted China would follow more in the steps of Germany or Singapore, rather than follow the American economic model.
“Many argue China should go after the US model free market, minimum regulation, low tax rates,” he said. “My view on this one is that fundamentally this will be a question that will be answered by the billions of Chinese people.
“Their preference … I think is quite different from the Americans. In China, because of the tradition of Confucianism, people put more emphasis on public order, the social good … than individual liberty.
“The Chinese economy will be more like the Singaporean or German model [with] relatively speaking to the US, less individual economic or perhaps individual freedom.”
As for how the people can make their preference known to the Chinese leadership, he said: “The answer is very simple. Twitter.”