China's economic 'new normal' deserves applause: CME chairman emeritus

Although China's economic growth is slowing down, it is still resilient and has promising prospects, Leo Melamed, who is recognized as the founder of global financial futures markets, has said.

"I should applaud that," Melamed, chairman emeritus and chairman strategic steering of Chicago Mercantile Exchange (CME) Group, Inc., said here to Xinhua in a recent interview, commenting on China's economic policy.

He said he had noticed the change in China's economic situation and the Chinese economy's "new normal," expounded by President Xi Jinping at a recent meeting of the Asia-Pacific Economic Cooperation (APEC) forum.

In a speech at the APEC CEO Summit, Xi sketched out a full picture of the "new normal," which features an economy shifting gear from high to a medium-to-high speed growth and increasingly driven by innovation instead of input and investment, with its structure being constantly improved and upgraded.

"I certainly think that's right," Melamed, 82, said on the sidelines of an international dialogue held by the International Financial Forum (IFF), a Beijing-based international think-tank.

In the more than three decades since China adopted the policy of reform and opening up in 1978, the Chinese economy had been growing at an average pace of close to 10 percent annually. In 2012 and 2013, however, growth decelerated to 7.7 percent. In the first three quarters of 2014, China witnessed a growth of 7.4 percent.

Many economists worried that a slower growing China may expose the world economy to more risks. But Melamed, a market advocator, saw a new opportunity in it.

He noted that he had also noticed Chinese leaders' recent remarks on the promotion of the rule of law, which he said would ensure a more stable and secure legal system in the world's second largest economy.

"That's an important element in the growth of the market system," Melamed said, adding that China is playing a more and more important role in the world.

"China has an enormous role in the international system," he said, "It certainly moves the world in terms of trade and in terms of growth and so on. Everything that China does is important to everybody in all other nations in the world."

"China deserves to be listened to. And it deserves to be understood," he said.

As for China's financial reform, Melamed, who is also a founding member of the IFF and a long-time adviser to Chinese authorities on financial futures markets, said the country's futures markets have been developing, but they are still domestic and should be internationalized.

China needs more international competition in the markets so that they can become stronger, he said.

"In my view, competition is the most important element in success because it forces people and business to think smart," Melamed said. "Clearly, China is moving at an accelerated pace in the right direction."