The ever-deepening globalization and the application and popularization of IT will also help developing countries to bridge the technological gap with their developed counterparts. Besides, developing countries' higher savings ratio will offer them a forceful capital booster for development. Developing countries will attract more international capital, which will bolster their long-term growth, because of their improved infrastructure and institutional environment and developed countries' gloomy growth prospect. In fact, developing countries are likely to maintain on average 5 percent growth over the next 10 to 20 years.
Since China's fast-growing economy has slowed down owing to low global economic growth, it should increase its inputs in new technologies' R&D to gain an advantage in the next technological revolution. It should also allocate more funds for the training of talents to improve the quality of its workforce. In particular, the Chinese authorities should take more practical measures to improve the education system in its vast rural areas to offset the negative impacts of the changed demography.
China has long depended on external demand for its economic growth, but the global economic slowdown has made it review its economic development model. At the same time, the rise of other emerging economies has resulted in fiercer global competition for the country. These developments call for the Chinese mainland to expedite the transformation of its development model and reduce its dependence on exports. Moreover, it should also accelerate the implementation of its "go global" strategy and strengthen cooperation with other emerging countries to widen its market.
The authors are with the State Council Development Research Center. A report by a team of researchers led by the authors originally appeared in China Development Observation.
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