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Transformation key to China's economic growth

By Wan Qian (People's Daily Overseas Edition)

16:44, November 28, 2012

Edited and translated by People's Daily Online

The report of the 18th CPC National Congress proposed to speed up the formation of a new mode of economic development by focusing on enhancing the new driving force of innovation and relying more on domestic demand, especially consumer demand for economic development and thus outlined a clear roadmap for our country to achieve economic transformation.

Experts said that we should stick to the roadmap, firmly grasp the strategic basis of "expanding domestic demand", substitute the new engine of innovation for the traditional elements, and gradually bid farewell to the traditional model of development to realize China's economic transformation.

Transformation is the key to China's economic rebirth

Since the Reform and Opening up, China has created an economic miracle with an average economic growth rate of above 9.8 percent over 34 consecutive years, ranking the world's second-largest economy in 2010.

However, with changes in the elements that support China's economic development, the traditional unbalanced, uncoordinated, and unsustainable extensive growth mode has come to an end.

Economic circles unanimously agree that China's economy has entered a period of major transition where transformation is the key to China's economic rebirth.

President of China Reform and Development Research Institute Chi Fulin said that China's economic growth is at a historical inflexion point to converse from high-speed to medium speed. The economic slowdown since 2011 reflects the short-term economic fluctuations as well as long-term trend of economic growth. Only by releasing the huge potential demand and accelerating the transformation of development mode can we cope with the changes in the pattern of domestic and international economy.

Economic commentator Ma Guangyuan believes that as international economic downturn led to deterioration of China’s foreign trade conditions, China must transform its economic development model as soon as possible.

Facing the test of “middle-income trap,” China needs to get rid of the development mode that extremely relies on investment and exports to fuel economic growth, lacks technological innovation, and has low consumption, backward service industry, vague boundary between markets and the government and slow pace of urbanization, and enter a stage of modern economic growth. Therefore, the 18th CPC National Congress has an epoch-making significance to arrangement of economic transition, Ma said.

“Economic restructuring is the key of striding over the middle-income trap,” said Zhang Monan, an associate research fellow with the Economic Forecasting Department of the State Information Center.

Zhang pointed out that it must comprehensively adjust the growth pattern and economic structure to achieve economic transformation, including using innovation to promote supply growth and tapping domestic market potential.

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