Quality and efficiency should feature in economic growth

Edited and translated by Liang Jun, People's Daily Online

China must speed up the adjustment of economic structure and achieve steady economic growth by improving quality and efficiency because the model of boosting growth through investment has not been able to continue, according to Bai Chongen, a member of the Chinese People's Political Consultative Conference (CPPCC).

The context of the current economic operation determines macroeconomic policy should pay more attention to economic transformation and improvement of quality and efficiency, rather than the growth rate only. China's economic growth has just regained steady and picked up; there is still room for increase, so too strong stimulus policy is unnecessary. China should continue to implement proactive fiscal policy and prudent monetary policy while making proper fine tune on macro policy.

Some people think the current increase rate is slow. While Cai Fang, director of the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences, believes when judging the economic growth, besides growth rate of economic output, we should refer to potential increase rate, which is determined by the supply of a variety of production factors.

Cai, also a deputy to the National People's Congress (NPC), thinks China's potential rate of economic output has dropped to 7.2 percent during the Twelfth-Five Year Plan (2011-2015) and labor population has also seen absolute decline, which are the fundamental reasons for restricting economic growth.

The current economic recovery is not simply to boost economic growth, but to achieve quality, cost-effectiveness and sustainable recovery. Low growth rate will lead the tightening macroeconomic operation environment and brought a series of difficulties and problems; but high growth rate is not conductive to transformation and structure adjustment.

Cai thinks potential growth rate and labor population will continue to decline in 2013. If we attribute the slow growth rate to insufficient demand, and take measures to stimulate demand to achieve growth, may exacerbate over-capacity and inflation.

Cai said to achieve steady growth, we should make efforts to improve potential growth rather than blindly seek high growth rate through stimulus measures to boost demand.

In the five to 10 years to come, China should further promote rural labor forces to transfer to non-agricultural industry, which helps increase participation of labor force, thus improves potential growth rate and, in terms of supply, provides power for economic growth.

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