China's new growth story: an uphill journey

Updated: 2014-03-14 14:15

BEIJING - The curtains of China's annual parliamentary meetings drew to a close, charting a clear course as the world's second largest economy sails towards fresh waters with a reform-determined leadership at the helm.

The growth targets are set. The way to the end mapped out. But what kind of journey will China's growth experience in 2014?

The story will not be the epic of the stellar growth seen during the past three decades. Gone are the days when double-digit GDP growth was easy to achieve with low-cost and abundant labor, easy credit and massive investment.

The leadership has realized the necessity and immediacy to steer the country's economy from investment-led expansion to consumption-fuelled growth.

Will it be a thriller? Some observers may favor this but that is the least possible script of China's future growth.

An economic hard landing with bursting property bubbles, chaos caused by runaway shadow banking and festering local government debt is a common fantasy among some observers. However, a Titanic-like crash scene is unlikely to take place as the risk-sensitive government has realized the gravity of the situation and taken drastic measures to rein in further worsening.

No doubt the journey ahead is going to be bumpy with the spectres of the above-mentioned haunting.

So China's growth story this year is more likely to be an uphill journey, with treasures to hunt and barriers to cross.

China has targeted its GDP growth at around 7.5 percent and CPI at about 3.5 percent this year, generally in line with last year's target.

But these growth indicators are not the only treasures to hunt. More advantages and benefits from the ongoing and upcoming reforms on all fronts will provide the biggest surprises.

The financial sector is one of the key reform priorities outlined in the government work report. Bosses of the country's financial watchdogs said on Tuesday that China will liberalize deposit interest rates, roll out deposit insurance and set up private banks, all of which will rejuvenate the whole economy.

However, barriers are in the way. The country has to be aware of domestic traps of overcapacity, financial and debt risks and environmental degradation, while weathering the impact of volatile global financial markets. It is set to be an uphill journey.

The knack for hurdle-leaping is reform.

Reform is the top priority for the government's work this year, Chinese Premier Li Keqiang said last week, four months after a key meeting in November outlined a wide-ranging reform package.

"How can an arrow shot be turned back?" Li said at Thursday's press conference. It might sound cliche, but painstaking reform seems to be the only path that China can take to juggle its different priorities.

Like all adventures, it takes guts and wits to carry on the journey. With utmost determination and concrete actions to push reforms, we will see a fascinating yet difficult balancing act of growth and reform, and hopefully a happy ending.