Interview: Innovation, better-skilled labor to drive China's development: Chile's ex-ambassador

China is entering a new development phase marked by greater innovation and a better-skilled labor force, Chile's former ambassador to China said.

"Innovation has become a central element," said Fernando Reyes Matta. "Going from 'Made in China' to 'Designed in China' is the symbol of this process, which relies on the creativity of the younger generation."

In a recent interview with Xinhua, Matta, now director of the Chinese-Chilean Culture Institute, spoke about China's new Five-Year Plan (2016-2020) and how it will change the country's traditional economic growth pattern.

"The Five-Year Plan tackles the complex issue of how to shift from one development model to another, where domestic consumption, by a growing middle class, drives change and maintains annual growth at about 6 percent," said Matta.

The transformation calls for China to gradually move away from export-driven production, which has served the country well for many years, but relies too much on foreign demand and causes too much stress on the environment.

China today aims to promote cleaner industries, such as technology and services, Matta said, predicting that along with the expanding service sector, new development sectors such as energy, digital communication, entertainment, climate change control and others will emerge.

The former ambassador said China needs to "apply a rigorous central control of the macroeconomy," listing provincial, banking and real estate debt as potential risk factors.

Matta, who also heads the Center for Latin American Studies on China, is confident that China can meet its growth target though some Western observers feel it is unrealistic given the troubled global economic outlook.

"China can maintain the annual growth of 6.5 percent. Beyond that, (the society) requires a shared feeling that the benefits are widespread without inequality," he said.

"People have to feel they have reached a level of development and personal benefit" if China wants to successfully conclude its Five-Year Plan with "a society that is modestly well off" by 2020, the former ambassador added.

On the environment issue, Matta said the Communist Party of China has committed itself to the concept of an "ecological civilization" and Chinese officials appear determined to tackle the problem.

As environment affects the basic life of people, "whatever the government does in this area will have a huge impact," he said.

The world is "watching how China manages environmental issues" since China unveiled environmental protection targets as part of its development plan, Matta added. Endi