Domestic market key to growth
Updated: 2011-09-25 07:56
By Chen Xin (China Daily)
XIAMEN, Fujian - China should transfer its growth mode to a consumption-led economy under the new backdrop of world economy, experts said at a forum on Saturday.
"China's reform and opening up implemented for more than three decades have proved a right decision and created a world miracle," said Zhou Wenzhang, vice president of the Chinese Academy of Governance.
He was speaking at a forum focusing on China's reform and opening up and world economic growth in Xiamen, Fujian province.
China has sustained a nearly double-digit year-on-year economic growth rate on average in the past 30 years, with its gross domestic product soaring from some $140 billion in 1978 to $6 trillion last year.
China contributed more than 20 percent to the world's GDP growth during 2000 to 2009, slightly more than what the US contributed, according to Goldman Sachs.
However, Chi Fulin, director of the China Institute for Reform and Development, said at the forum that China's growth has been largely driven by export and investment, rather than domestic consumption.
Domestic consumption contributes around 37 percent to China's yearly GDP growth, while for developed countries, the figure is around 70 percent, experts say.
Chi said the debt crisis in EU and the US means those markets will keep shrinking for at least five years, so it would be difficult for China to sustain its export-led growth.
To achieve the transition, he said, a government-led growth mode should be turned into a market-led one, and "we should make people wealthy before the country becomes rich".
Chi said China's economic growth rate in recent years is always quicker than people's consumption growth.
"I hope people's consumption could be coordinated with the nation's production capability."
To boost consumption, he suggested a quicker start for the country's income distribution reform measures and a further adjustment of personal income taxation policy to increase the public's income.
The government should also adjust its role from being an investment pusher to a real public-serving facility, said Chi.
(China Daily 09/25/2011 page2)