A report released by the Development Research Center of China's State Council predicts China will maintain around 8 percent annual GDP growth rate from 2006 to 2010, China's 11th five-year plan period.
"Calculated according to constant price of the year 2000, China's GDP would reach around 2.3 trillion US dollars at the end of 2010. The per capita GDP would reach around 1,700 dollars," says the report, submitted to the 2005 China Development Forum, a two-day forum that opened here Sunday.
The report says from 2010 to 2020, China's annual GDP growth rate will slow down a bit to around 7 percent on the average.
It says the major propeller of rapid economic growth in the period from 2006 to 2020 remains rapid capital formation, which will contribute to from 60 percent to 70 percent of the economic growth.
Meanwhile, growth of total factor productivity, brought about by urbanization, investment in human capital, economic system reform and technological innovation, will make increasingly bigger contribution to economic growth.
"Growth of total factor productivity is the key to maintaining sustained and relatively rapid economic growth in the future," the report says.
The report mentions four major factors supporting China's economic growth in the future. First, China has formed relatively strong material and technological bases. The bottleneck of capitalhas been overcome in general. Second, China's industrial structurehas experienced great change, with the international competitive power of its manufacturing industry having grown markedly. Third, China has a vast domestic market and great growth potential. Fourth, China is deepening reform and the investment environment will be improved constantly.
According to the center, export by China's manufacturing industry accounted for 91.2 percent of China's export. Foreign direct investment in the sector made up 70 percent of total foreign investment in China.
Han Wenxiu, a senior official at the National Development and Reform Commission, agreed that China's economic success story witnessed over the past two decades will continue in the coming 20 years.
China's economy enjoyed average annual growth rates in excess of 9 percent over the past two decades.
"China has reasons to maintain rapid economic growth over the next 20 years, although the rate may decline slightly," said Han, the deputy director of the commission's Department of General Affairs.
This was mainly because of the accelerated urbanization process and the upgrading of the consumption structure from small items such as TVs and washing machines to large items such as houses and cars, he pointed out. Accelerated industrialization and local governments' strong desire to develop their economy will be the backbone of future economic growth, he pointed out.
Zhang Xiaoji, a senior researcher at the State Council Development Research Centre, told an earlier press conference that by the end of 2010, the country's gross domestic product (GDP) will reach US$2.3 trillion or US$1,700 per capita based on prices and exchange rates in 2000.
"By 2020, the nation's GDP will reach US$4.7 trillion, or US$3,200 per capita," said Zhang, director of the centre's Foreign Economic Relations Research Department.
China's overall GDP ranks sixth in the world after decades of rapid economic development, with the nation's per capita GDP exceeding US$1,200. The country also has the world's second-largest foreign exchange reserve.
With the continuous improvement of the investment climate, China has also become one of the most attractive investment destinations.
"China has basically removed the capital bottleneck for future development," Zhang said. The technical conditions for future development was also better than ever, he said.
China's industrial structure underwent huge upgrading as the nation's economy expanded, Zhang noted.
The country's manufacturing industry grew by an average annual rate of 10.3 percent during the period of the 10th Five-Year Plan (2001-05), accounting for 52.2 percent of China's GDP in 2003.
"The industrial structure is evidently characterized by technical upgrading," he said. "The proportion of the high-tech sector in overall industrial output rose from less than 10 percent in 1993 to more than 20 percent in 2002."
The per capita income of urban and rural residents grew by annual averages of 9.2 percent and 5.2 percent from 2001 to 2005, Zhang said.
This improved standard of living allowed for increased spending on healthcare, transportation, telecommunications, education, entertainment and housing, rather than just food and clothing, he said.
In recent years, people have even begun to spend more on expensive items such as houses and cars.
"The upgrading of the consumption structure will cause an upgrading of the industrial structure," he pointed out. Zhang noted that China's gradual shift from a planned economy to a socialist market economy greatly promotes productivity.
Along with China's integration into the global economy, the nation will further increase the levels of capital, advanced technology and management expertise introduced from developed countries, to expand its development, he said. However, "good prospects don't mean plain sailing," Zhang said.
China will face a number of obstacles in the course of its future economic development.
The nation's resources and the environment are coming under greater pressure as China strives to maintain sustainable development.
The country is expected to witness a period of rapid industrialization over the next 15 years, which means the country will consume a huge amount of resources.
But China has far fewer resources on a per capita basis than the global average.
"The environment will pay the prices unless the country shifts from the current resource-intensive model of economic growth," Zhang said.
China's future economic growth will also be challenged by poor growth quality, unbalanced development and uncertain global economic factors.
China's market economy is far from perfect, resulting in poor quality growth.
The gaps between different regions, and rural and urban areas, and the income gap between different groups will also have an impact on social stability.
By People's Daily Online