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China shifts from GDP primacy to quality growth

Updated: 2013-12-13 11:17
( Xinhua)

BEIJING - China is shifting away from its GDP-focused growth model to one that pays more attention to growth quality, overseas experts said.

A wide and comprehensive adjustment in domestic governance is taking place in this ancient country, said Kenneth Liberthal, a senior fellow at the Washington-based think tank Brookings Institution, referring to the host of reforms carried out by China since the 18th National Congress of the Communist Party of China (CPC) last year.

Shortly after his observation, the CPC announced a major reform on its official government evaluation system: abandoning the previous GDP-obsessed assessments and putting more emphasis on public well-being and the environment.

The new assessment system resonates with President Xi Jinping's economic strategy, in which he called on governments at all levels to pursue "solid and real GDP", and strive for "efficient, quality and sustainable economic development".

Cutting the obsession with the GDP figures well reflects the country's resolution to carry out a comprehensive and deep reform.

Gustaaf Geeraerts, director of the Brussels Institute of Contemporary China studies, said to achieve modernization, a country does not only need to develop its economy, but also need new ideas in politics, culture, society and the environment.

Moving the focus away from GDP also means a broader and deeper understanding of "growth".

Instead of impressive figures and rankings, growth should focus more on the people's livelihood. The point, which the Chinese leadership are fully aware of, was brought to the table in the recently-concluded Third Plenary session of the 18th CPC Central Committee, in which systematic guidelines in spheres such as politics, economy, society, culture and ecology were mapped out.

The approach also underpins China's confidence amid an economy slowdown.

Instead of issuing massive stimulus packages, the Chinese leadership chose to streamline its governance, manage expectations and relieve market dynamics, which finally put the economic indexes back on track.

Stefan Bielmeier, Head of Research and Economics at DZ Bank (German Central Co-operative Bank), said there is a consensus that the recent slowdown of the Chinese economy is an intentional move by the new government, with the aim of placing the country's economy on a sustainable path.

Giving up the obsession with GDP also helps to pump more inner dynamics out of the market.

Gunnar Lang, deputy head of the International Finance and Financial Management Department of the Center for European Economic Research, said by downplaying GDP, the market will be freer and the allocation of resources more efficient. It also helps release the vigor of private and foreign capital and rein in the bubbles and overcapacity, said Lang.

By streamlining administrative approval, pushing forward interest rate liberalization and introducing private capital into finance and transportation among other areas, China is lessening its GDP-worship and pushing forward the reform step by step.

"The best policy is the one that can benefit its people," as some experts pointed out, the recent reforms that have been undertaken in China have shown that the development strategy of the country has shifted from quantity growth to a quality one.

 
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