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Upgrading Chinese economy

By Sun Lin | China Daily | Updated: 2013-08-13 07:27

Structural adjustments to realize sustainable development should go on while keeping growth within reasonable range

Having experienced rapid development for more than three decades, the most important task is economic structural adjustment, to realize both the quantity and the quality of sustainable growth.

In China, maintaining high-speed economic growth is not only an economic issue, it is also a social and political issue. In the first half of 2013, the number of university graduates increased to a record 6.99 million, while GDP growth declined to 7.6 percent, which is the lowest in the past three years. Maintaining stable economic growth is necessary as a continuing slowdown could lead to many problems in society.

But at the same time, the extensive mode of economic growth over the last 30 years has led to serious structural imbalances, high energy consumption, low efficiency and a low technological level. China's economy urgently needs restructuring.

In fact, realizing the leadership's goals to double the 2010 GDP and double the per capita income for both urban and rural residents by 2020, which is the foundation for building a moderately prosperous society in all aspects by 2020, will be realized if the average economic growth rate is 6.9 to 7.1 percent over the next eight years.

This is actually the government's bottom line for the growth rate. If the restructuring leads to the economy slowing below this, the central government will certainly introduce stimulus packages.

But an overheated economy will not be accepted by the government either. If the economy grows too fast based on the current economic structure, it will aggravate the current imbalances, which in turn will increase the resistance to structural adjustment and undermine the economy's healthy development in the long term.

Therefore, it is necessary to set a reasonable range for economic growth, setting a floor rate that can still maintain stable growth and realize the employment goal, as well as a ceiling rate to prevent inflation.


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