Interview: China's social, economic reforms can maintain strong economic growth to 2020: expert

China can maintain strong economic growth and escape the middle-income trap if substantial social and economic reforms are implemented.

"But it will take the development of institutions conducive to promoting innovation and entrepreneurship, such as the rule of law," James Laurenceson, economist and deputy director of the Australia-China Relations Institute, told Xinhua.

Chinese officials are due to finalize the 13th Five-Year Plan, the forward document that details the social and economic agenda over the 2016-2020 period.

The government has committed itself to making China a "moderately prosperous society" by 2020, including doubling per capita incomes, leading China into a high-income society.

While short-term 7-percent GDP growth is achievable, maintaining 5.5 percent by 2020 would be a tremendous achievement due to sheer size of China's economy, Laurenceson said.

"(It's) because of maths and not economics," Laurenceson said.

"Growth of seven percent actually implies the economy adding more and more dollars each year.

"This makes maintaining a constant growth rate a tough assignment for any country."

Latest indications from the International Monetary Fund (IMF) show the Chinese economy to be 44 percent larger by 2020, maintaining its Number 1 ranking in terms of purchasing power, though in terms of U.S. dollars, ranked the second in value.

By 2030, China is expected to overtake the United States and become the top ranked world economy, however in per-capita terms, the U.S. will remain much richer, Laurenceson said.

With per-capita income still lagging behind high-income countries, Laurenceson argues this provides Chinese officials with enough motivation to make the "tough decisions" they need to escape the middle-income trap and achieve President Xi Jinping's "China dream".

"This means that reform cannot stop now. Corruption must be tackled, the rule of law must be promoted," Laurenceson said.

Flow of influence though processes such as corruption have been at the top of Xi's reform agenda, but in other cases, reform will also involve the central government taking on local governments for the benefit of the country as whole.

Vested interests that wish to maintain the status quo would undoubtedly push back against inherent structural reforms, such as state owned enterprises rallying against lowering barriers for private firms, increasing market competition.

"Still, I see no reason why we should be particularly pessimistic about China's commitment and ability to implement meaningful economic reforms," Laurenceson said.

"We shouldn't expect that Chinese institutions will always look the same as those in the West and there is no reason they must. It is how effective they are that matters."

Economic policy that spurs innovation and productivity on the back of private-entrepreneurs rather than state-owned enterprises over the next five years would need to be implemented to maintain steady growth, reforms that would be hard to implement even in the West, Laurenceson said. Endit