Latest News:  
Beijing   Light to moderate rain/Light rain    13 / 8 ℃  City Forecast

English>>China Business

Commertary: Finding a dynamic balance

By Chi Fulin (China Daily)

09:20, November 09, 2012

Investment structure needs changes as quickly as possible to meet the consumption demand created by urbanization

Will China's economic growth in the next five to 10 years be driven mainly by investment or consumption? Maintaining a rational investment rate is necessary because China is still in the process of rapid economic transition and development. The problem is that the lingering high investment rate and the over-expansion of investment have led to a serious imbalance between investment and consumption. In order to adapt to the changes in consumption demand resulting from the country's ongoing urbanization, it is imperative to transform investment.

The next 10 years will be a crucial period for China's transformation and development, and releasing consumption demand is the most important economic and structural readjustment. This requires mobilizing private capital so the government can invest more in public services.

Consumption not only drives economic growth and creates investment opportunities, it also leads to optimization of the investment structure. But in the short term, consumption is a slow variable and investment is more important in stabilizing growth. In the medium and long term, however, consumption is the ultimate purpose of investment. Only when investment is turned into consumption, can it be regarded as being effective and become a driving force for growth, especially as the prolonged investment-driven growth is unsustainable because the low-cost expansion period and demographic dividend are coming to an end.

Although investment without the support of consumption has a role in stabilizing short-term growth, it will most likely create more obstacles to growth and lead to a distorted industrial structure, reduced marginal efficiency of investment and overproduction.

【1】 【2】 【3】 【4】

Recommended Features:
[Special]'Made in China' Revisited From 'Made in China' to 'Created in China' A Journey to Cultural Renaissance
Gold collection issued to mark 'Year of Snake' China: A Fast-growing Force in IPR IPR in China: Local Roots Bearing Global Fruits
IPR in China: Causes for the Thriving Cause Caofeidian coal wharf put into use Canton Fair wraps up on Sunday


Leave your comment0 comments

  1. Name


Selections for you

  1. China's stealth fighter concept model

  2. PLA Macao Garrison finishes 13th rotation

  3. Unforgettable moments in Nov. (III)

  4. Flight test of unmanned aircrafts conducted

  5. First inter-blood-type liver transplant in China

  6. Harbin Autumn Automobile Exhibition

  7. Embroider best wishes on insoles in Shanxi

  8. China's rich people will reach to 280 million

Most Popular


  1. Commentary: Hot money needs cooling
  2. Smart solutions for better city, better life
  3. China remains an 'engine' in global economy
  4. M&A of listed companies gaining steam
  5. Is 'culture' inferior to 'commercialization'?
  6. Chinese liquor makers "sober up" over bans
  7. Strength of Chinese culture lies in understanding
  8. Securing China's e-commerce growth
  9. Hammered ore prices threaten Chinese iron miners
  10. CNN Beijing chief: China's challenges, opportunities

What’s happening in China

Landmark building should respect the public's feeling

  1. Herders, sheep flock move to winter pasture
  2. First inter-blood-type liver transplant in China
  3. HIV patient to sue hospital over cancer op refusal
  4. Test in intelligent vehicle for food detection
  5. Smart card, dumb refund rules