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Growth with quality

(China Daily) Updated: 2012-12-21 07:05

After the annual Central Economic Work Conference that concluded over the weekend set the tone for quality and efficiency-oriented national economic growth next year, Vice-Premier Li Keqiang on Wednesday reiterated such a policy shift and called for renewed efforts to push for its implementation.

At Wednesday's meeting on social and economic development and reform, Li put particular emphasis on economic quality and efficiency, adding that there is competition among some regions for a higher rate of growth. He called for realistic economic development, noting that growth in the gross domestic product which does not benefit ordinary people is pointless. China's economy in the future should seek coordinated development among energy, resources and the environment.

Li's remarks are another example of China's determination to focus on the quality rather than the sheer quantity of economic growth.

Such a shift is particularly important as China's economic growth over the past decades has largely been built on an extensive economic development model. This helped the country become the world's second-largest economy in 2010, but at the cost of its deteriorating environment and the depletion of some natural resources.

The quantity-prioritized economic model with investment and exports as the main drivers of growth has also hampered the country's efforts to develop itself into a consumption-led economy.

Due to its lack of core technologies and innovative capabilities, China's manufacturing sector, once called the "world's workshop", is expected to face gloomier prospects amid fierce international competition, especially as the United States and other developed economies accelerate their reindustrialization strategies.

Decelerating exports in the context of feeble external demand have also posed a severe challenge to how China will cope with looming overproduction in some industries. Without changing its investment and export-driven economic model, China will find it difficult to sustain its growth and avoid the "middle-income trap".

That the government has refrained from launching a new round of stimulus despite the slowdown in growth over the past year has already demonstrated the change in its development approach.

The unambiguous message Li emphasized on the pursuit of higher-quality economic growth and greater efficiency and the steps the authorities are taking in urbanization and restructuring will help China realize a much-needed economic transformation.

 

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