China recovers fast from recession to cement its economic dominance

By Wang Fangqing, in Shanghai 

China's rapid, aggressive rise as a communist-ruled giant developing country has been a topic in the world in recent years. During US President Barack Obama's first week long trip to Asia in November, he spent three days in China to show its importance as the biggest financial backer of the U.S.

In a speech to Chinese youths in Shanghai, he spoke highly of China’s great achievements, including lifting hundreds of millions of people out of poverty, as “an accomplishment unparalleled in human history.”  And he highlighted the growing important role China plays in the international community. 

This year, despite being hit by the global economic plunge, China surpassed Germany to be the world’s largest exporter. In early November, the World Bank raised its latest forecast for China’s GDP growth in 2009 to 8.4% from the previous 7.2%, thanks to the Chinese Yuan RMB 4 trillion (US$0.58trillion) government stimulus package, while much of the rest of the world has seen its economy shrink. 

The prosperous economic outlook has made China a welcoming home for foreign investments again after money was withdrawn during the peak of the crisis last year.  The latest big deal came on November 4, when Walt Disney Company announced it had received permission from China’s central government to build a Shanghai Disneyland, the third Disney theme park in Asia, making it one of the largest foreign investments in the country so far with a budget as huge as US$3.5 billion.  

In 2009, China also replaced the US as the world’s largest auto market. According to the Beijing-based China Association of Automobile Manufacturers, 10 million autos had been sold nationwide by October this year, up 37% year-on-year. In November, the Shanghai Automotive IndustryCorp (SAIC), one of the largest state-run auto-makers which runs joint ventures with General Motors and Volkswagen, told the Chinese media that the company is planning to launch new hybrid cars to coincide with the World Expo Shanghai 2010. SAIC also said it is testing new models with advanced plug-in hybrid technology. So far, simple, low cost micro hybrid vehicles have been the focus for most domestic auto companies.  

China is planning to achieve an annual output capacity of 500,000 hybrid vehicles by 2011, according to a government plan released in March 2009.  Hybrid cars are just part of China’s ambition for the clean energy business. China is to pour about RMB 250 billion (US$36.5 billion) into nuclear facilities and equipment in the next 15 years, according to the national energy plan, which aims to increase China’s nuclear power generating capacity to 60 GWs (gigawatts) from the current nine GWs by 2020. 

 In the meantime, China is also busy at exploring opportunities abroad. Just in November, the country invested US$1.5 billion in Western Texas to build a 600-megawatt wind farm. China has been accelerating construction of wind farms throughout the country. It passed the US this year to become the world’s largest market for wind energy.