Xiong Yuan: China's Development Enters a New Age

2018-03-05 IMI

This article first appeared on China Daily Europe on February 2, 2018. Xiong Yuan, Research Fellow of IMI To push forward high quality rather than quantity, supply-side reform must continue to deepen The 2017 Central Economic Work Conference, which was held in December, clearly identified that China's economic development has entered a new age, with its basic feature being that the country's economic development has transferred from a high-speed development phase to a high-quality development phase. Looking to the future, the focus of China's economic development will officially change from quantity to quality, and the index significance of GDP growth will be lessened. Achieving high-quality development, deepening supply-side structural reform and preventing and controlling pollution will be the key issues. China's central government has been more confident of economic development. At the Central Economic Work Conference, it was considered that comprehensive economic reform has made China's economy more active and resilient, and the country's economic power has moved to a new level. Moreover, compared with previous years, the reference to "moderate expansion of total demand" was deleted, which indicates that the central government doesn't overly worry about economic growth. In fact, since 2015, the fluctuation rate of China's GDP growth every quarter has been no more than 0.1 percent, in 2017, the GDP growth was almost the same continuously for four quarters, which means that China's economic growth has realized a steady transfer from high-speed growth to medium-to-high-speed growth. It is expected that in the future, economic growth will continue to have low fluctuation and resilience. Economic growth will not go down, which will also provide good opportunities for China's economy to achieve high-quality development. If we look at the targets that are stated in the report of the 19th National Congress of the Communist Party of China, stable economic growth of China is still necessary. From 2018 to 2020, the annual GDP growth should be around 6.4 percent. To be specific, in 2018, China's economy is expected to remain stable and resilient. GDP growth is likely to be about 6.6 percent. Industrial-capacity reduction will help to increase the profit of industrial companies, the growth of real estate investment and infrastructure investment will be stable, and the recovery of the global economy will help with the recovery of China's trade. All of these were the main drivers of stable economic growth in 2017 and will continue to be the main drivers in 2018. International organizations, including the International Monetary Fund and the World Bank, have also lifted global economic growth expectations. So this year, the recovery of trade is expected to continue to be the main driver of economic growth in China. On the other hand, to push forward high-quality development, it will be crucial to continue the deepening of supply-side reform, and pollution prevention and control will be no less important. In the 2017 Central Economic Work Conference, eight important tasks were allocated, and the foremost is the deepening of supply-side reform. To be specific, the trend is to push "Made in China" to "Create in China", from "China speed" to "China quality", and from "manufacturing hub" to "manufacturing power". Obviously, these three transitions have put forward a higher standard for development of China's manufacturing industry. So to increase the quality of the supply side and expand high-quality supply will be the main direction for supply-side reform, and compared with the past two years, improving underdeveloped areas could also be an important part. Meanwhile, clear water and green mountains are the necessary requirement of high-quality development. Pollution prevention and control is clearly a main task in the next three years, and to greatly reduce the emission of pollutants, among many other regulations, shows that in the future the regulation of pollution will still be very strict. It is also expected that the industrial producer price index will stay high and not be able to decrease. Moreover, in the future, the measures that will be taken to prevent and control pollution will be more professional and scientific.

DOWNLOAD

Xiong Yuan: China's Development Enters a New Age

related articles

tags