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GDP Maintains Medium Speed Growth in the Coming 15 Years
As pointed out recently in a research report by the Economic Research Institute of National Development Planning Committee the coming 15 years will see China's GDP achieve a medium growth rate of 7% or even slightly higher, if taking into account both the relationship between demand and supply and the contribution of technological progress to economic growth.
During the "Tenth Five-year Plan", the potential GDP growth rate is expected to reach 9%, with the actual rate at 7.5% while the potential rate for the period of 2006 to 2015 is to be at 8.5% with actual growth predicted at 7%.
The report says it would be very difficult for Chinese economy to maintain such a high-speed growth rate as that in the last 20 years.
One reason behind it is the demand constraint becomes more and more evident, and the economic growth restricted as such by demand is generally slower than that affected by resource constraint.
The second reason is that transition from extensive growth to intensive growth would affect the growth rate to some extent.
Thirdly, judging from the experience of various countries in the world, it is a general law that a country's economy slows down after a period of high-speed growth.
The report holds the forecast on economic growth rate in the period of "Tenth Five-year Plan" should take the following three factors into consideration.
First is that the factor supporting the growth type from extensive development of quantitative expansion to intensive growth of efficiency improvement has changed, secondly China has the potential of maintaining fast growth and thirdly slow growth would bring difficulties to the solution of many economic and social problems.
Data shows that every percentage point growth in second industry could increase employment of 800 to 850 thousand people and that in tertiary industry can bring about more than 1.2 million employment.
This is crucial for solving the problem of newly increased employment of 6 to 7 million. The report predicts that China's actual GDP growth would stand at 7.5% during the "Tenth 5-year Plan" period, 1.5% lower than the potential productive capacity.
The price would remain at a stable and low level. The GDP-deflated inflation rate is estimated at 3%, and that for the period of 2006 to 2015 expected to stand at 5%.
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