China to be single largest driver of global economic growth: Former Victoria state premier

CANBERRA - John Brumby, former Victorian state premier, is confident that China will continue to be the world's single largest driver of the economic growth and opportunities "in my life time."

He made the remarks during an exclusive interview with Xinhua at the reception by the Chinese Embassy in Australia on Canberra Networking Day of the Australia-China Business Council (ACBC), of which Brumby serves as the National President, on Wednesday evening.

"If you look at Australia, in the December quarter, the GDP grew quite strongly. And the yearly growth is above estimate. A large part of the drive is China," he said.

"While it's true that prices had dropped dramatically in the resources area, in tourism, Chinese spending and arrivals are up by nearly 30 percent. In international education, China is No 1 in the number of students which is up significantly again. All these areas -- property investment, foreign direct investment, agriculture, exports, dairy exports -- are up dramatically."

Brumby said that the higher than expected growth rate in Australia can be attributed to a large part to the transition of Chinese economy from an investment-led economy to a consumer-led economy.

"It means more services, more students, more tourists, it means more beef, more mutton, more wool, being exported to China," he said.

Brumby conceded that China's growth will slow. "It's almost impossible to imagine that China could continue to grow at 10 percent per annum."

But on a Chinese GDP of $10 trillion, if China grows just six percent, it's adding $600 billion of new economic growth to the world's economic growth, almost a third of the world's new economic growth. Comparing to ten years ago, while Chinese economy was 3 trillion with a growth of 10 percent. "So there are more growth and more opportunities."

"So yes, the 'new normal' is real, it's more sustainable. It is slower, but it's consumer-led, it will have more bumper on the way, but China will remain the single largest driver of the global economic growth and opportunities for my life time."

Brumby noticed that Chinese President Xi Jinping and Premier Li Keqiang had made it very clear including in recent days that if growth in China does continue to slow, there is room for fiscal stimulus.

"We've already seen some relaxations in bank lending. So that shows the government is ready to respond and provide some stimulus as we saw in Australia during the Great Financial Crisis. I think that's a positive sign. There is capacity there. There are plenty of savings, plenty of ability to do that on behalf of China."