Economic transformation key to long-term growth

China is at a turning point which may have notable influences on its long-term growth and the global economic governance in the next few years, and the country still has substantial room for policy advances, said experts at a Beijing-based seminar on Sunday.

Chi Fulin, president of the China Institute of Reform and Development in South China's Hainan province, said a structural reform is needed to open the service sector, optimize the entrepreneurial environment, and protect rural residents' right to use land.

The economic transformation is a sea change that can only proceed when institutional barriers are removed, he said. "For that to happen, the reformers should seek to strike a balance between speed and structure, long-term and short-term growth, policy and institution, government and market, top design and grassroots innovation."

The seminar, co-hosted by the China Institute of Reform and Development, Zhejiang University Press, and the China National Radio, was followed by the promotion of a book series on the country's economic transformation and innovation.

Chi's comment was echoed by other attendees. To replace its extensive growth with intensive growth, China needs to press ahead with the market-oriented reform, said Zhang Zhuoyuan, a senior economic researcher from the China Academy of Social Sciences.

"We have the power and will to maintain an annual GDP growth rate of 6.5 percent by 2020, but that requires extra caution and scientific planning," Zhang stressed.

Long Guoqiang, deputy director of the Development Research Center of the State Council, said with the competitiveness of China's labor-intensive products declining, upgrading the service industry should be a priority. "Industries such as car-making, steel-making, and oil are still overprotected, which is hardly a boon to their competitiveness in the global market."

The governments at all levels aspiring to reduce the excessive capacity should draw certain lines in industrial management and tailor their efforts to local conditions, said Fan Hengshan, deputy secretary of the National Development and Reform Commission.

"Favorable policies should be made available only to industries that have a promising prospect, as well as proved advantages," he said. "The market has a decisive say in economic transformation, and the competition is supposed to rule out the unfitted and urge those survivors to meet the changeable demands."