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New target growth shows better quality, efficiency of domestic economy
Author :  Shi Jianxun Source : Chinese Social Sciences Today 2017-03-13
China aims to expand its economy by about 6.5 percent in 2017 while it will strive to achieve better results, said Premier Li Keqiang on March 5, when he delivered the annual Government Work Report at the opening of the fifth session of the 12th National People’s Congress.
The growth target signals that China is entering a new stage that emphasizes better economic quality and efficiency.
The targeted growth rate is based on economic principles and national conditions. The Chinese economy has a number of promising fields. However, the depletion of resources and harm to the environment caused by rapid development has prompted policymakers to consider such circumstances as resources, energy and transportation capacity when setting targets. It is necessary to set a reasonable growth target. The Chinese government no longer eagerly seeks fast economic growth but rather focuses more on quality and efficiency. Also, it pays greater attention to employment and public welfare, making a leap in understanding and using economic principles.
A more moderate growth target is an expectation rather than a constraint, reflecting the role of government in steering the market. Lower growth contributes to supply-side structural reform that advocates reducing inventories, costs and production capacity while improving weaknesses as well as pushing de-leveraging.
Meanwhile, China’s stable economy is the prerequisite for pushing forward reform and restructuring, safeguarding employment as well as raising quality of life. The target shows the confidence of China in dealing the relationship connecting growth, reform and restructuring.
Also, a moderately prosperous society will be achieved based on an average growth of about 6.5 percent each year during the period of the 13th Five Year Plan (2016-20). If this can be accomplished, China’s GDP and the per capita income of urban and rural residents will double by 2020. The Chinese economy grew by 6.7 percent in 2016, creating room for target adjustment in 2017 and beyond.
The growth target will maintain China’s great contribution to the world economy. Calculated based on the price of the US dollar in 2010, China’s 6.7 percent growth contributed 33.2 percent of global growth in 2016. It is projected that China’s 6.5 percent increase in 2017 will account for about 30 percent of global.
China will continue to promote free and convenient global trade and investment. Also, it will firmly facilitate global economic cooperation and safeguard the primary role of multilateral trade mechanisms.
Strategic emerging industries and modern service sectors will drive the Chinese economy in the future. There will be a shift from a resource-intensive economic model to one emphasizing technology and innovation as well as optimizing and upgrading the global industrial structure. China will continue adopting opening-up policies that advocate mutual benefit and share its development opportunities with the whole world.
Shi Jianxun is director of the Institute of Finance and Economics at Tongji University. The article is translated from People’s Daily.