How are China's future development prospects?


【Response】There are still considerable opportunities in China's economy. It should achieve growth, both in quality and efficiency.

According to the China-economy pessimists, the reason why China's economy will collapse is that for a considerable length of time, Chinese economic growth has been driven by investment, but investment-driven growth is not sustainable.
Economist Lin Yifu believes that we cannot ignore the positive role of the consumption, but a country must not be over-reliant on consumption-driven economic growth. We are surrounded by evidence that past national debt crises were caused by excessive consumption.

China should still hold to the investment-led economic growth model, according to Lin. On the one hand, China should rely on technological innovation to improve workforce production levels and increase revenues. On the other hand, China should rely on industrial upgrading, constantly improve infrastructure, and reduce transaction costs to achieve growth, both in quality and efficiency.

China's development prospects are very good. First, from a global perspective, the level of government debt is relatively low. Overall debt accounts for only 39.4 percent of GDP, while in most developed countries the figure is 100 percent. Japan's government debt has reached 200 percent. So China has the room to take a proactive fiscal policy.

In addition, there is a very high level of private savings in China, and China has nearly 4 trillion yuan of foreign exchange reserves. In these favorable conditions, China will have no problem in maintaining growth between 7.5 percent and 8 percent in the next few years.

NPC deputy Yan Chengzhong says there are still considerable areas of potential growth in China's economy, such as urbanization, improving the ecological environment, and increasing the contribution of consumer spending.

To address its current problems, China should continue with a comprehensive program of reform, and work to further enhance the endogenous dynamics of the economy and market vigor, according to Xu Shaoshi.