Six changes in conditions backing China's economic growth

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Last updated at: (Beijing Time) Thursday, November 13, 2003

Six changes in conditions backing China's economic growth

China's economy has entered into a new stage of fast growth from its adjustment-recovery period since the outbreak of the Asian Financial Crisis in 1997, and six major changes have taken place in the conditions bolstering up China's economic growth, said Qiu Xiaohua, Deputy Director of the National Bureau of Statistics (NBS), on November 10.

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A hot issue at the "2003 China Economic Growth Forum" is whether China's economy can maintain its sustained rapid growth. On November 10 Deputy Director of the National Bureau of Statistics (NBS) Qiu Xiaohua said that China's economy is in a new era and six major changes have taken place in the conditions bolstering up China's economic growth. The six changes are as follows:

First, the institutional mechanism supporting China's economic growth is undergoing profound changes, which is heading for a perfect market economy. This can be seen from the lowered threshold of market access, relaxed government control, better investment and fund-raising climate, a sounder legal environment, and more efficient utilization of market elements.

Second, the industries propping up China's economic growth are no longer labor-intensive sectors in their traditional sense. Capital- and technology-intensive industries have begun to play an important role in China's economy. For example, the electronic information industry, realty industry, and auto industry, collectively called " troika", have grown to be the engine of the economy.

Third, the domestic market is not the only force that sustains economic growth, the world market will also act a major part.

Fourth, Enterprises groups sustaining China's economic development will take businesses of mixed ownership as the mainstay. State-owned enterprises (SOEs) play the role as will manifested more and more in providing a better environment for the common progress of the whole society and for the advancement of the economy of mixed forms of ownership.

Fifth, a major change has occurred in regional structures for China's economic growth. If China's economic expansion was motivated by the economic take-off of the Pearl River Delta in the 1980s, and the growth was driven jointly by the Pearl River Delta and the Yangtze River Delta in the 1990s, then along with the full-scale takeoff of the national economy, the regional pattern of China's economic growth will gradually diffuse, thereby forming nationwide diverse economic growth belts with mutually complementary functions and relatively concentrated industries. The convergence of industries will advance alongside the process of marketalization, internationalization, and urbanization, such a situation will take shape across the country, and

Sixth, a new concept on China's economic growth has been established, turning from pure pursuit of GDP growth to the drive for all-round, coordinated and sustainable development.

New period of high-speed growth

China's economy has entered into a new stage of fast growth from its adjustment-recovery period since the outbreak of the Asian Financial Crisis in 1997, and there have been fundamental changes in the driving force for economic growth, the deputy director said on November10.

He also said at the 2003 China Economic Growth Forum held in Suzhou, coastal Jiangsu Province, that what worried him last year was how to keep a sustained growth of the economy, but now some people are worried about whether the economy is overheating, China's economy has got across a turning point. The first three quarters of this year saw an 8.5 percent increase. And power shortage, price hike for steel products, and the substantial rise in housing and automobile consumption have all convinced people that China's economy is marching forward toward a new higher stage.

Qiu pointed out that in the discussions on the supporting factors boosting this round of growth, many critics linked up the growth with the rapid expansion of the credit scale as well as the economic behavior of local governments. However, a question that must not be neglected is that fundamental changes have taken place in the force supporting economic growth. In terms of investment, the fast economic growth is attributed to the rapid increase in private investment and overseas direct investment. It is also worth noticing that residents' upgraded consumption must not be underestimated.

According to Qiu's analysis, China's WTO membership has ushered in a new stage for China's opening to the outside world. The initial establishment of a new framework for the socialist market economic system has added fresh vigor to China's economy. A well-off society has been established as a whole, and new space has been opened for economic restructuring. In a word, China's new economic growth is the natural result of the interaction between marketization and internationalization and the increasing reinforcement of the inherent power of the economy.

By PD Online staff member Lijia

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