O'Neal: Ten Years Of Rebalancing China'S Economy

Jim O'Neill, the father of the BRICs and Jim ONeil, said that these ten years are the ten years of China's economic rebalancing. Now that five years have passed, China is ready to play a more important role in the global economic stage.

Back to the beginning of this ten year, O'Neill predicted the performance of BRICs (Brazil, Russia, India and China) in the next 10 years.

Five years later, China is the only country to achieve O'Neill expectations.

Assuming that China's GDP growth reached or nearly 7.3% in the fourth quarter of last year, the average real GDP growth in China will be slightly less than 8% from 2011 to 2014.

O'Neill has predicted that China's economy will grow by an average of 7.5% annually in the next 10 years (as predicted by Chinese leaders as early as 2011).

If China maintains 7% economic growth in the next 5 years, China will achieve a O'Neill forecast.

If so, according to the current exchange rate, by 2020, China will become a $10 trillion economy, far more than half the size of the United States.

At the same time, the size of China's economy will be two times that of Japan, larger than that of Germany, France and Italy.

And nearly 1.5 times the sum of Brazil, Russia and India.

Brazil and Russia have disappointed O'Neill.

In fact, their economic performance is doubtful of their long-term potential.

India is also disappointing, but its economic growth accelerated in 2014.

Modi's election and the sharp fall in oil prices gave India an opportunity.

India is still likely to achieve O'Neill's expectations in the past ten years.

Its economic growth in the next 5 years may even surpass China.

Many international commentators are still looking at China.

They look forward to China's reality.

Growth has dropped sharply to below 7%.

Their reasons usually involve excessive debt, inefficient loans, weakening export market and continuous failure of consumers to play a greater role in the economy.

All these things are related, but Chinese policymakers have recognized these challenges and actively overcome them.

Particularly interesting, contrary to this pessimism, is the red hot performance of China's stock market.

In the past few months, the Shanghai Composite Index has been the best performing market in the world.

Those who claim China

Where are the people who never go up? The bearer explains that the Chinese market is an unsustainable bubble, or that buyers are forced to buy stocks in order to make the economy look good.

O Neill thinks liquidity may play a role, but not all of the stock market.

O'Neill can think of at least three reasons to look at China:

First,

The collapse will increase the real incomes of consumers and help them play a bigger role in the economy.

Second, even if housing prices have stagnated and even begun to decline, China may avoid serious credit crunch.

Moreover, the drop in real estate prices has enabled more Chinese to afford housing.

Third, China's moderate inflation provides room for more liberal monetary policy.

The above factors will help China to rebalance the economy more easily by increasing residents' income, increasing the housing ownership of migrant workers and reforming the retirement system.

In 2016, China's economy will grow by 6%-7%.

As chairman of the G20, China can play a more important role in the global economy.