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People's Daily Online>>China Business

Tapping growth potential

By  Zheng Xinli  (China Daily)

14:14, February 01, 2012

Deepening reform and expanding opening-up will inject new vitality into economic development over the next two decades

China's economic growth declined to 9.2 percent in 2011, down from 10.4 percent a year earlier, as the result of the tightened monetary and banking policies adopted to rein in inflation. This moderate decline is within government expectations and still overshadows economic performance in the rest of the world.

But there are still some in China and beyond who have expressed concerns over the country's economic prospects, believing China's fast-growing economy has already run out of steam after more than 30 years of marvelous development and that the pace will continue to decelerate. Some have even predicted the country's economy will suffer a hard landing. Such concerns and conclusions, however, contravene China's basic national conditions and the huge economic potential that remains to be tapped.

There is no doubt the country's economy can maintain a few more decades of fast growth if continuous reforms are adopted to release this new vitality.

China's enormous demand potential is yet to be realized and stimulating this will help keep the economy on a fast growth track. By the end of 2011, the country's urbanization ratio had reached 50 percent, a symbolic figure in the country's history, but still far behind that of developed countries. The ratio is expected to rise to 70 percent in the next two decades if it is raised by one percentage point ever year. An ever-growing urbanization ratio will lead to the expansion of investment and consumption. Statistics show that one higher percentage point in China's urbanization ratio will mean an investment of about 1 trillion yuan ($158.26 billion) in infrastructure construction every year. This, together with corresponding increases in public services, represents enormous potential for the country's economic development.

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