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Op-Ed Contributors

New growth model needed

By Hu Shaowei (China Daily)
Updated: 2010-06-29 07:53
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Economic transformation will lay a solid foundation for domestic development and help propel the global economy

After weathering the global financial crisis, both the government as well as the Chinese industry have reached consensus that China's economic development pattern needs to be transformed.

Changing the growth model and optimizing its industrial structure has become imperative for the nation.

Although hailed by many as a miracle, the Chinese economy has suffered greatly due to its irrational economic structure, which includes imbalanced demand and uncoordinated supply, inefficient usage of resources, severe environmental pollution and uneven development levels seen across the nation.

The current economic growth pattern has for long been overly dependent on exports and investments, rather than domestic demand and consumption.

From a perspective of rural-urban and inter-regional differences, China's urbanization process and development of its central and western regions carry great potential, compared with eastern coastal areas.

China's agricultural infrastructure is still vulnerable; the secondary sector is large in scale yet not powerful enough; the development of its tertiary sector is lagging, and some industry segments have been beset by overcapacity problems.

The nation is also facing mounting pressure due to shortage of resources and environmental pollution.

As China's economy grows in size, the nation must shift from a resources-intensive and export-driven economy to one that is resources-efficient and technologically savvy.

It should also enable the public to share in the benefits of a concerted development of the economy, society and environment in order to maintain fast and sound economic growth in the long run and avoid major fluctuations.

Of course, China's commitment to transforming its economic growth pattern is nothing new; it has been under the lens for more than a decade and a half.

In fact, the 1981 government work report had put forward 10 development guidelines centering on improving economic performance.

During the 9th Five-Year Plan, the central government emphasized that the economic growth pattern must move from an extensive to an intensive mode.

The 11th Five-Year Plan too strategically focused on economic growth pattern transformation.

However, no lasting change has been seen in this regard since the institutional apparatus underpinning the traditional economic development pattern is stubbornly playing its role, and a sound social, cultural and political milieu conducive to innovation and entrepreneurship hasn't yet been established.

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