China Determined to Work for Quality Economic Growth

Seeking quality growth

Facing both opportunities and challenges, China is to change its growth model and make domestic consumption a pillar of its economy as experts said. And at same time, more importance should be attached to the quality of growth and to moving up the value chain, so as to achieve sustainable and healthy development.

A statement issued after the central economic work conference said enhancing quality and efficiency of economic growth "will be a central task” next year, marking a major shift from solely pursuing growth speed to paying more attention to the fitness of economy.

In his speech at the 18th National Congress of the Communist Party of China (CPC), Hu Jintao, its former general secretary, said China must speed up the creation of a new growth model and ensure that development is based on improved quality and performance.

To boost quality growth, the expanding of domestic demand will be a strategic basis next year. New growth points should be created in domestic consumption, which will serve as both a strong pulling power and foundation for sustained and healthy development.

China’s economy has for most of the past three decades relied the advantage of a large and inexpensive labor force to become the world's largest manufacturer for the global consumer markets. But China now needs to restructure its economy to wean off reliance on exports for growth, as its main trade partners like the European Union and the United States are embroiled in debt crisis.

Urbanization has been considered as a main driver for domestic demand and will be actively and steadily pushed forward in 2013, according to the statement.

"Advancing urbanization will boost both investment and consumption, which plays a significant role in promoting China's sustained and steady growth," said Lian Ping, chief economist at the Bank of Communication.

The urban population on the Chinese mainland, which exceeded rural population only at the end of 2011, is expected to hit 70 percent by 2040.

In a country with a population of more than 1.3 billion, each percentage point of urbanization ratio represents an increase of 1.3 million urban residents, which can translate into trillions of yuan of investment and consumption.

Although China has entered the ranks of middle income countries, many enterprises still remain in an unfavorable position in global industrial value chain.

Hu Jintao stressed in his speech that top priority must be given to scientific and technological innovation in overall national development.

Experts agreed that to transform the economic growth pattern, innovation should be developed into a new driving force, thus realizing the internal growth of economy.

In the new development period, China’s economy is to strive to transform from being “factor-driven” and “investment-driven” to being “innovation-driven”, featuring improved productivity by means of technological advancement.

China will push forward industry upgrading through enhancing enterprises’ innovative capability, and steadily shift away from cheap assembly lines to high value-added production, from “made in China” to “innovated in China.”