Innovation bright spot as economy slows down

Updated: 2015-02-23 13:40

By Zhang Yuchen(China Daily USA)

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Innovation bright spot as economy slows down

Hu Angang, director of the Center for China Studies at Chinese Academy of Sciences and Tsinghua University

China has maintained high-speed economic growth in past decades but the recent slowdown has stirred some concern about its future development. Top experts, however, say the lower rate of growth should not be cause for alarm nor impact day to day life.

"The economic slowdown and the reform deepening would not necessarily influence overall Chinese happiness," pointed out Hu Angang, director of the Center for China Studies, a joint research center of the Chinese Academy of Sciences and Tsinghua University.

In 2014, China's GDP growth rate was 7.4 percent, the lowest point since 1990, which has been described as a turning point linked to the global economy.

"It is worth noting that, despite this year 's economic growth rate slowdown, the economic structure is actually in the adjustment," said Hu. "The energy consumption is declining and there are bright spots of innovation."

With the incremental GDP being the biggest since 1990, amounting to 4.84 trillion yuan, it is equivalent to the total amount of the 1994 GDP. From an international perspective, China 's GDP reached an annual increase of more than $800 billion, equivalent to the GDP of a medium-size developed country.

Chinese cities adjusted their GDP goals in 2015 as economic setbacks emerged in late January. Shanghai's GDP hit 2.36 trillion yuan ($378.3 billion) in 2014, up 7 percent over 2013, falling short of a target 7.5 percent growth projected for the year. Beijing had a GDP growth of 7.3 percent in 2014 and is projected to gain a modest 7 percent in 2015.

The economic development of this scale, maintaining grow at the rate of around 7 percent, will draw attention to any improvement of people's income levels and quality of life.

"Economic growth doesn't exist in a vacuum. If lower growth comes with, for example, less pollution, then lower growth may increase happiness," said Andrew Clark, an economist at the Paris School of Economics, who specializes in China's economic well-being.

China's economic development has now entered a "new normal" for energy conservation to create a favorable macroeconomic environment, the types of resources bound to reduce the growth rate of aggregate demand, but also reduces the elasticity of demand.

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