How to Double China's Per-capita Income

3. Ensuring the doubling of per-capita GDP in a decade: annual growth rate of 7.2 percent needed

Together with the target of doubling per-capita GDP, President Hu Jintao also set a goal in his report to double China's overall GDP by 2020, which means that the annual GDP growth rate must reach 7.2 percent for the next eight years.

Yang Zhiyong believes that the Chinese government will give up the pure pursuit of GDP growth, but raising per-capita GDP does requires the premise of overall GDP growth. In the future, China's economic growth mode will transition from government-driven to market-driven. The transition requires system stability to build up the market confidence as well as strike a balance between efficiency and fairness.

Zhang Monan said that achieving GDP growth rate of 7.2 percent is a challenging task. The difficulty lies in how to preserve China's labor cost comparative advantage during the process of salary increases and the income distribution reform. She believes that government should increase investment in education, research and development, innovation, improve business productivity, and accelerate industrial transformation and upgrading in order to promote economic growth.

Gao Huiqing said that China's per capita GDP is still low compared to other countries. At present, China's economy is facing a transformation, which affects its economic growth speed. China will face many challenges in the future to maintain an annual 7 percent GDP growth rate.

4. Will a doubling of per-capita income lead to inflation? Little pressure of price increases in next five to six years, analysts say

Based on the principles of economics, increasing per-capita incomes would trigger rising demand, posing a risk for inflation.

Zhang Monan said there is a risk of having cost-driven inflation in the future, but it can be offset by improved production efficiency, through successful business restructuring and upgrades.

Both Yang Zhiyong and Gao Huiqing take a rather optimistic view — Yang said prices for some goods would rise due to higher labor costs, but the price of some products would go down due to increased productivity.

Guo mentioned that China will still face a serious problem of overcapacity in the next five or six years, although revenue increases will lead to rising demand. There will be a long period of offsetting excess capacity, so the pressure for inflation is small.

5. What can China learn from foreign countries? – A large piece of the pie is based on how big the pie is

In December 1960, Japan announced the start of a 10-year national income doubling plan. In 1967, real national income of Japan had doubled, reaching the target ahead of schedule.

Zhang Monan said Japan's total economy had a considerable capability before it started the income doubling plan, but China's has not yet reached such a level. For China, we still have a long way to go to increase national productivity.

The article was originally published in Chinese, and translated by Wang Zhiyong.

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.