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E-mail Xinhua, November 12, 2012
To Chinese officials and entrepreneurs who have gotten used to high-speed growth in past years, the coming decade may be quite different, as they will have to readapt to a country that is growing at a slower pace.
When outlining the development objectives for the next eight years in his report to the 18th National Congress of the Communist Party of China (CPC), Chinese leader Hu Jintao said China's 2020 GDP and per capita income should double that of 2010.
To realize this goal, China has to maintain an average economic growth rate of around 7 percent annually, compared with the double-digit GDP growth seen since 1978, when it initiated the reform and opening up drive.
The readjusted GDP development goal is aimed at making China's development "much more balanced, coordinated and sustainable", Hu said.
TRANSITION UNDERWAY
Analysts believe it won't be difficult for the CPC to deliver on their promise by 2020.
"By setting such a target, the CPC has sent a signal to the outside world that it will scale down its economic growth on its own initiative," said Li Yang, vice president of the Academy of Social Sciences.
Policymakers, Li said, will pay more attention to the quality of development and focus more on improving people's lives in the future.
Grim realities have forced top policymakers to lower the country's future growth, as the Chinese are more aware of the importance of protecting their environment.
A recent protest against a chemical plant that was slated to be built in China's eastern city of Ningbo in July followed a series of similar events in other cities in Sichuan and Liaoning provinces over the past two years.
Such protests have forced the ruling party to set its future governance agenda to face mounting challenges from the people, who are increasingly reluctant to sacrifice the environment for economic growth.
Hu urged CPC members to raise their ecological awareness, saying that promoting ecological progress will be a long-term task of vital importance for the people's wellbeing and China's future, as the country is facing increasing resource constraints, severe environmental pollution and a deteriorating ecosystem.
Anticipating economic difficulties this year, the authorities planned ahead early and lowered the GDP growth target for 2012 below 8 percent for the first time in eight years, in an effort to encourage local officials to pay more attention to healthy growth.
Delegates attending the 18th CPC National Congress said the readjusted economic growth goal is not only closely related to the changing environment at home and abroad, but also to the acceleration of China's economic restructuring and the promotion of quality development.
China's GDP expanded to 47.3 trillion yuan (7.5 trillion U.S. dollars) in 2011. However, widespread social problems have appeared, making the current mode of development unbalanced, uncoordinated and unsustained.
"In the past, we developed only to eliminate the shortage of goods and services. Now many sectors are suffering from overcapacity," said Shao Ning, deputy director of the State-owned Assets Supervision and Administration Commission and a delegate to the Party congress.
Prevailing ideas regarding development now concern progress in industrial upgrading and restructuring with improved quality and better performance, Shao said.
"Undoubtedly, the congress will steer China into an era of massive readjustment and great transition. We did not care too much about the consumption of resources in the past, now we must focus more on the carrying capacity of the environment," said Li Mingxing, vice chairman of the China Enterprise Confederation and a delegate to the congress.
To Song Zhiping, chairman of the China National Building Materials Group Corp. (CNBM), the Chinese economy will grow mildly during the next several years after almost two-digit growth in the past three decades, as "the larger the economy is, the harder it is to maintain growth."
POTENTIAL AHEAD
Ba Shusong, a financial researcher with the State Development Research Center under the State Council, or China's Cabinet, said the economy is undergoing an economic cycle, referring to the natural fluctuation of an economy between periods of expansion and contraction.
"Starting from the low point in 2008, China's economic growth climbed to a peak in 2010 thanks to the 4-trillion-yuan stimulus package. It has gradually slowed since then and reached another low this year," Ba said.
He said the economy will continue to seek new sources for growth this year, while in 2013, more focus will be given to economic restructuring.
"I expect economic growth to bounce back to around 8 percent in the fourth quarter," he said.
Delegates and some economists insist that China still has vast potential in maintaining growth due to significant potential domestic demand, while the accelerating urbanization process will give the country another boost for steady growth.
Cao Yuanzheng, chief economist with the Bank of China (BOC), said the country's economic transition has significance far beyond its boundaries, describing it as being part of the rebalancing of the global economy.
The global rebalance requires China to consume more and invest less while requiring the United States to invest more and consume less, Cao said, adding he believes China will become the world's largest importer in the future.
A recent report from the BOC said China will maintain an average economic growth of 8 percent annually in the coming decade.
"If a company can grow along with the Chinese market, it will be the fastest growing firm in the world," Cao said.
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