By Yang Daqing (China Daily)
Updated: 2007-11-05 07:03

In his report to the 17th National Congress of the Communist Party of China last month, General Secretary Hu Jintao said: "It is essential to significantly accelerate the transformation of the development pattern and improve the socialist market economy". He also said: "(To) accelerate transformation of the mode of economic development and promote upgrading of the industrial structure is a pressing strategic task vital to the national economy as a whole."

Shifting from "transforming the mode of economic growth" to "transforming the mode of economic development" is a natural requirement of the Scientific Outlook on Development, an important policy drawn up to explore China's economic development, one that is suited to the country's conditions.

We should act in the following areas:

First, the concept of development should be reconfigured to put people first. Hu's report pointed out that: "The Scientific Outlook on Development takes development as its essence and puts people first as its core." The Scientific Outlook on Development does not deny the importance of economic development and GDP growth, but emphasizes that economic development should meet the development needs of everyone and benefit all. Human beings should not be regarded as mere tools of development. Economic development is not an end, but a means to benefit the people. We should ensure that development is for the people, by the people and with the people sharing in its fruits.

To insist on the people-first principle, we should pursue development in the basic interests of the people. We should satisfy the ever-growing material and cultural needs of the people, guarantee the people's economic, political and cultural rights and interests and promote people's all-round development.

Second, we should change the focus from economic growth to economic development.

Economic growth stresses the quantity of economic output, while economic development focuses more on the improvement of structures and other matters of quality. Economic growth is more about material progress and the improvement of living conditions, while economic development covers both the growth of GDP and the reform of the social and economic systems and social values. Economic growth is a tool for economic development, and economic development is the goal of economic growth. In the past some officials pursued GDP growth as a kind of political achievement, while ignoring social-economic development. Now is the time to shift from merely pushing up the GDP to optimizing the economic structure, increasing efficiency and improving social welfare.

Third, we should change the path of development by improving the country's industrial structure.

For a long time, the Chinese economy focused on secondary industries. Agriculture developed at a slow pace as the service industry lagged behind. The structural contradiction was prominent.

We should optimize the industrial structure and increase the competitiveness of the tertiary industry. We should build the new socialist countryside, develop modern agriculture and industrialized management of agriculture, set up a permanent mechanism to allow urban areas to help rural areas.

We must keep to the new path of industrialization with Chinese characteristics, emphasize both optimizing the industrial structure and improving the employment structure, as well as promote the transfer of rural surplus labor. We should accelerate the development of a modern service industry that covers finance, commerce, information technology and logistics, encourage manufacturers to expand from processing to services such as research and development, reduce resource consumption and increase the added value of products.

Fourth, we should shift the drive for development by enhancing China's capacity for independent innovation.

The Chinese economy has grown rapidly, though mainly by increasing inputs. We have paid heavy prices as a result of our use of resources. This situation is not sustainable. We must enhance the country's capacity for independent innovation. We should create a market-oriented innovation system with enterprises as the mainstay. We should deepen institutional reform in the technological arena, promote the integration of technology and the economy. We should support the popularizing of energy-saving products and enhance the system for conserving energy and reducing emissions to build a resource-conservative and environment-friendly society.

Fifth, we should change the mode of development by perfecting the macro-control system.

The government should enhance its social management and public service functions. The key principal of economic management should be safeguarding the market instead of intervening in specific economic activities. The government should promote the construction of a modern market system to allow for fair competition. The government should transform functions and promote institutional reform. The market system should be further completed. We should continue restructuring education, public health and culture to promote social harmony. We should deepen rural reform to balance urban and rural development.

Last but not least, we should transform the performance-assessment system.

We should orientate the official assessment system to the requirements of the Scientific Outlook on Development. We should focus on people-oriented criteria, the quality and efficiency of economic operation, coordinated development of economic and social causes and sustainable development in assessing officials' performances.

The author is an associate professor with the Party School of Hunan Provincial Committee of the CPC

(China Daily 11/05/2007 page4)