In Premier Li Keqiang’s 2013 government work report, the 2014 GDP growth target was set at 7.5 percent. In the context of anticipated changes in the current economy and the domestic and international environment, China’s economy is expected to maintain steady growth.
Understanding China's economic growth
Since reform and opening up, China’s economic growth rate has remained steady at almost 10% for more than 30 years – China's "economic miracle". Nowadays there is a diminishing demographic dividend, and the cost of the labor force is growing.
The result is that the traditional strategy of labour cost competitiveness is weakening; high investment, high consumption, and heavy pollution are becoming major problems which have a heavy impact on natural resources and the environment.
China expects to maintain a moderate and even high economic growth rate of around 7 percent in the next decade; if the average annual growth rate can reach 6.7% over the period from 2014 to 2020, this will produce a doubling of GDP in comparison with 2010.
New impetus for structural adjustment
China’s economy is entering a new phase with a medium-high economic growth rate of about 7 percent. In recent years the economic structure has undergone a significant change; the emerging impetus will drive economic growth.
- The growth of the service sector has accelerated, and its proportion of GDP has increased;
- Progress has been made in transforming manufacturing industry;
- Consumption paterns have been optimized and improved;
- Exports of high-tech have exceeded the average growth rate;
- The employment status has been improved;
- Urban and rural incomes have continued to grow steadily.
Economic growth is expected to reach its target in 2014
In 2014, although the global economic crisis has not yet come to an end, the overall situation is stable. In particular, economic recovery in the United States and Europe will favor the stable development of emerging markets; But China should remain wary of the US exit from quantitative easing (QE), capital flow volatility, inflation pressure and other potential risks. Overall, in 2014 the global economy will perform better than last year, therefore China’s overseas economic environment and overseas market demand can be expected to improve. Exports are projected to grow at about 8% this year.
The article is edited and translated from 《我国经济有望保持稳定增长的良好局面》, source: People's Daily Overseas, authors: Yu Bin, Ren Zeping