By Thuso Khumalo
JOHANNESBURG, Aug. 29 (Xinhua) --The recovery of the global economy will require a combined effort and, especially, China could play a critical part, a South African expert told Xinhua on Wednesday.
As the world's second largest economy, China has still some level of means to underwrite its own economy, and in part have a spillover effect to the rest of the world, Standard Bank economist Goolam Ballim told Xinhua.
To a certain degree, Ballim said, China has been able to provide some percentage to the mitigating force to counter American and European economic problems.
"The Chinese realize that as much as Europe impacts on them, they too can have an impact on the global industrial cycle and I do think the Chinese have shown a readiness to act," said the expert.
"The epicenter of the current financial crisis is a Western one and the first form of remedy must come from the rich countries in Europe and the United states," he said.
"Europe's ills are not just a high level of indebtedness, but it's because Europe is largely inefficient," he told Xinhua.
He pointed out that the eurozone crisis is likely to continue for some time due to lack of decisive action. "Europe is structurally on a weak growth profile and it requires substantial reforms which both the politicians and the citizens generally seem to be unwilling to make," the expert said.
Ballim said though China is also feeling the impact of the slowdown in the global economy, the country has a fairly dynamic economy.
"It has built much strength and empowered itself with a lot of resources in recent decades and this has made it to remain strong during times of weakness," he said.
The economic expert added that China's large resources reserve pool means that it can underwrite its economy.
He applauded China for enacting easier monetary policies to encourage its banks to lend more liberally during weak times.
Ballim stressed that China has joined the United States and Europe in terms of presenting the global economy with more headwinds than tailwinds, saying, "There is a lot that can be learnt from China."
"Lessons that can be learnt from China include effective pursuit of efficiency alongside perpetual quality improvement," he said.
He also praised China for its productivity gains in the manufacturing sector having increased workers' wages at a double digit rate. "Increased capabilities in China's manufacturing sector have encouraged workers to shift to more sophisticated technology sectors," he said.
"In the urban areas you have very substantial dynamic gains in the price of labor, which is testimony that when there is a connection between efficiency and quality labor can benefit in real terms," said the expert.
Ballim said the slowdown in the global economy is lightly to hit on South Africa as an emerging economy.
The latest economic figures from Statistics South Africa (Stats SA) have revealed that the country's economy is on a positive rise. Stats SA on Tuesday reported that during the second quarter of 2012, the country scored an economic growth rate of 3.2 percent, compared with 2.7 percent in the previous quarter.