Walking a successful path toward lasting prosperity

A worker assembles a robotic arm at a factory in Foshan, Guangdong province. [Photo provided to China Daily]

China's biggest achievement in recent years has been its ability to maintain GDP growth despite adverse external developments and domestic challenges, said Jim O'Neill, the economist who coined the acronym BRIC.

O'Neill came up with the term in 2001 as a way to describe Brazil, Russia, India and China as a group of nations at a similar stage of newly advanced economic development. They were viewed as the economic powerhouses of the future. South Africa was added nine years later, creating the term BRICS.

"China is the only one of the four BRIC countries that, since 2011, has grown in line with my expectations," O'Neill said, ahead of the 19th CPC National Congress. "Brazil and Russia have struggled, India has done better, but China has managed to grow at close to 7.5 percent for the decade, in line with the official desire to double living standards this decade."

O'Neill, a former chief economist with Goldman Sachs, said few large countries have walked the path toward prosperity as successfully.

As the world's second-largest economy, China's GDP is close to $12 trillion, which is more than twice that of Japan, and larger than all the other BRICS economies combined. For at least 70 countries, China is the largest import customer, and in 2016, it became Germany's largest single-nation trading partner.

O'Neill noted that if China grows by between 6 and 7 percent for another three years, the nominal growth rate for the decade will have been about 10 percent. Such growth would create more than $3 trillion of additional GDP, which would be equivalent to another India.

In the runup to the Party Congress, which begins on Oct 18, O'Neill said he would like to see Beijing continue along the same path it has been on for the past 20 years. He would also like to see the government further improve the lives of migrant workers, and see it encourage more consumption relative to savings and production.

"As China has now reached a GDP-per-capita level of close to $10,000, it has got to a time for the leadership to be bolder in giving migrant workers the same rights as people born in cities," said O'Neill, who added that he believes the government should abandon the term "migrant worker" in its economic analyses.

He said some of China's experiences could be used to solve pressing problems in other countries, and its successes in managing countercyclical and fiscal policy can be matched by few Western countries.

"China recovered from the 2008 financial crisis much quicker and more powerfully, with much less persistent negative consequence than the UK," he said, noting that China's 2009 fiscal stimulus and its fine-tuning of monetary policy could serve as examples to the United Kingdom and other countries.

When the BRIC acronym was first created, China's economy was valued at $1 trillion. Today, it is worth 12 times that.

Because of its economic strength, O'Neill said he believes China has become a huge influence on world trade and investment.

On a personal level, he added that he cherishes the moment he stood next to President Xi Jinping for a photo at the Boao Forum in 2013. "I'm proud that I was chosen to stand there in the order, and I shall keep the picture for a long time," he said.

During Xi's state visit to the UK in 2015, O'Neill got to accompany the president on various engagements because he was commercial secretary to the treasury.

"I was proud and excited that I played my role in developing the so-called golden relationship in 2015 and it was an extraordinary benefit for the UK, relative to other countries," he said. "It happened at a time when China was more focused on the quality of growth than just the amount of growth, and this is almost ideal for what the UK excels in."