Year-ender: Economic Preview for 2014

Updated: 2013-12-24 04:45 (China Daily)

Growth and Reform: Words China can live by

Editor's Note: Every year is an important year, but 2014 will be more so. Rarely has any year featured both growth and reform, much less a balance of the two "irreconcilable" goals, as some China watchers see them. Indeed, ever since the outbreak of the global crisis in 2008, China has heard a great deal more about growth than about reform.

But without due reform, what growth could there be? China has seen it all — overcapacity in traditional heavy industry, large investment zones filled with few real companies, a glut in office space in major cities, and some heavily indebted local governments. These hindrances will harm the country’s growth and stability unless there is more reform.

As China's experience has shown since the 1980s, reform is the only way to achieve good growth: by raising workers' productivity, removing bureaucratic shackles on small enterprises, knocking down monopolies by large corporations and boosting market competition. Growth and reform are never a contradiction.

Doing both in the right way is precisely what China will attempt to do in 2014, as its leaders decided at the Third Plenum in November and at the Central Economic Work Conference in December.

In the process, of course, some old ways of seeking growth must end — most notably, squandering public funds on the building of pollutant-heavy industries. But urbanization, along with the creation of intercity transportation networks, will serve as new engines for both growth and reform.

If urbanization is not a project led only by the government, and if more room is created for competition in the service industries, growth will come along in due course. There is no reason that it won't, and we can believe in the "decisive role" the market will play.

China Daily interviewed 12 economists to share their observations about the Chinese economy in 2014.

Click the picture to read a PDF file

Year-ender: Economic Preview for 2014


Most Popular