A bright economic outlook for China in 2013

By Li Huiru: 0 Comment(s)Print E-mail China.org.cn, December 30, 2012

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The Forum on China's Economic Outlook was held at the Convention Center of Beijing International Hotel on Dec. 29, 2012. [By Li Huiru/China.org.cn]

"China's economic outlook will be on a much evener keel next year."Despite several quarters of slowing growth this year, most analysts and market observers expressed their confidencein China's 2013economic outlook at theForum on China's Economic Outlookheld at the Convention Center of Beijing International Hotel on Dec. 29, 2012.

The theme of the Forum was "Accelerating the formation of a new economic developmentmode in China in 2013: challenges and opportunities."Theevent broughttogether leading authorities, top economists on China's economy and private and third sector leaders, to present their forecasts of China's economy in the coming year and their latest research on pressing economic issues.

Cheng Siwei, vice chairman of 10th NPC Standing Committeeand China's "father of venture capital,"stressed the need for China to speed up its economic structure and growth pattern.During his keynote speech, he compared investment-driven growth to drug addiction.

According to Chen, the GDP growth generated by the investment in the real economy can be categorized into four types. The first type is efficientinvestment, which means profits can be reclaimed in five to ten years. The second is long-lasting and inefficient infrastructure investment, like investment in highway construction, in which case the payback period is relatively longer. The third type is the invalid GDP. In this case, the investment cannot produce anything or generate any benefits. The forth type is destructive GDP. The jerry-built projects all fall to this type. These projects collapse shortly after the completion. Though they increase GDP, such GDP cannot contribute to the creation of a solid, prosperous economy.

"What we want is real growth," Chen stressed. "It is important tofurther advance reforms and optimize China's economic structure and growth pattern. The newly-elected Communist Party leadership has also pledgedto do so during the recentlyconcluded annual tone-setting Central Economic Work Conference. We would rather have a substantialGDP growth of 7 percent, than a flatulent one of 9.5 percent."

Li Wei, president of the Development Research Center of the State Council, said at the forum that recent efforts in fighting corruption have already had their effect on China's high-consuming. He said the consumption of high-class tobacco and alcohol, especially in luxury hotels, has declined over the past month. The consumption on theflower market has dropped by by 80 to 90 percent.

"While studying the potential of the domestic consumption market, one factor should be taken into consideration in addition to international factors," Li said. "The newly-elected Communist Party leadership has demonstrated its determination in battlingcorruption, which is a very good thing. However, we have to take into account that the increased efforts in anti-corruption will certainly squeeze the spending through abnormal gains."

Guided by the Development Research Center of the State Council, the Forum on China's Economic Outlook has been organized jointly by China Economic Times and CET.com.cn annually since 2009.

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