China’s Visionary Stimulus

In the coming years, China’s engagement with the developing world will continue to deepen. The National People’s Congress has discussed using a portion of China’s foreign-exchange reserves to finance infrastructure projects in developing countries. Such a Chinese Marshall Plan could seek to strengthen developing countries’ capacity to absorb Chinese goods, or it could advance a broader development agenda. Some central-bank officials have even advocated the establishment of a supra-sovereign wealth fund for developing-country investment.

China’s continued development demands that it continues to enlarge its capacity and influence in foreign assistance. The global economic crisis accelerated the timetable for this process considerably, forcing China’s leaders to pursue it simultaneously with the economy’s structural transformation. In this respect, Wen gave Li an invaluable head start.

Zhang Jun is Professor of Economics and Director of the China Center for Economic Studies at Fudan University, Shanghai.

Copyright: Project Syndicate, 2014.