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Changes in growth model a priority

Updated: 2012-11-09 08:31
By Chen Jia in Beijing and Zhang Chunyan in London ( China Daily)

Hu stresses importance of nation's continued economic transformation

China should firmly implement economic reforms and accelerate the change of its growth model in a bid to enhance the vitality and competitiveness of its economy, President Hu Jintao said on Thursday.

"In response to changes in domestic and international economic developments, we should speed up the creation of a new growth model and ensure that development is based on improved quality and performance," Hu said in his report to the 18th Party Congress.

He said making economic development the central task is vital to national renewal, and development still holds the key to addressing the challenges China is facing.

Hu's remarks come as China's economic growth has been slowing, mainly due to tightening measures in the property sector and sharply shrinking global demand for Chinese goods amid the eurozone debt crisis and the slack global economy.

Although the world's second-biggest economy is recovering from a seven-quarter slowdown and recent statistics suggest that the worst is over for China, many economists said the period of high-speed economic growth is over and China has to make changes in order to maintain sustainable and healthy expansion.

"China is in an important period of strategic opportunities for its development," said Hu.

"We should firmly maintain the strategic focus of boosting domestic demand, speed up the establishment of a long-term mechanism for increasing consumer demand, unleash the potential of individual consumption, increase investment at a proper pace and expand the domestic market."

As part of its 12th Five-Year Plan (2011-15), China will strive to expand domestic consumption to drive economic growth, a shift from largely relying on exports and investment.

"China's economy is severely challenged as the global economic slowdown has and will continue to hurt Chinese exports" which have been a major source of China's economic growth, said Chen Yongjie, deputy secretary of the China Center for International Economic Exchanges.

Peter Ho, chair professor of Chinese Economy and Development and co-director of the Modern East Asia Research Centre at Leiden University in the Netherlands, said: "Hu's report reflects a commitment to long-term strategies, which is reassuring for China's overall development."

China's transformation has also sent a positive signal to foreign businesses.

Jonas Parello-Plesner, a senior policy fellow at the European Council on Foreign Relations, said this will provide more opportunities for European and US exports and stimulate investment in China.

"Currently China's economy is open in some sectors, but there are still limitations on foreign investment in some others, like the financial services and construction sectors. If China opens up its economy more, opportunities will be created," said Parello-Plesner.

Hu also pointed out that "deepening reforms" is the key to the transformation of the economic growth model.

Diao Ying, Cecily Liu in London and Hu Yuanyuan in Beijing contributed to this story.

Contact the writers at dingqingfen@chinadaily.com.cn

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