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Business / Economy

WB predicts 8.4% growth for China

By WEI TIAN in Boao, Hainan and ZHANG YUWEI in New York (China Daily) Updated: 2013-01-17 00:20

"As a developing country and a transitional economy, China certainly faces many challenges to tap into this potential," Lin said at a business forum on the Chinese economy at the New York Stock Exchange.

CASS' He said the Chinese government now attaches more importance to stability than it does to a rapid pace of economic expansion.

"In the long term, we could never again see an accommodative global environment as it was during the 1990s," he said, adding that while external conditions deteriorate, growth on foreign trade will shift to urbanization.

"Globalization lifted productivity via a detailed labor division, and urbanization can do the very same," he said.

"For example, in large cities, a simple hairdressing industry can be divided into specialties for women, kids, and even dogs... Every market segment is large enough for an entire industry. Urbanization can be a major source of innovation," he added.

"China's urbanization will be the biggest opportunity for the global economy in the first half of the 21st century," He said, citing a quote from Josef Stiglitz, a Nobel laureate in economics.

But the transition won't be easy "in the urbanization process. There won't be a Wal-Mart categorizing orders, or a UPS delivering goods. We are on our own".

He suggested infrastructure should be a priority in urbanization, and such infrastructure involves a better legal environment and marketing network, rather than building airports and railways.

"It will not only be a reform of the economy, but a reform of the management system as well," he said. Such measures include less approval procedures, more sectors open for private investments, and innovative financing channels targeting small and medium-sized enterprises, he added.

Lin, the former World Bank official, said that among the challenges China faces are income disparity and corruption, which combined could produce social tension, and the need to exert discipline in tackling these problems.

But the new Chinese leadership understands these challenges, Lin said.

Contact the writers at weitian@chinadaily.com.cn and yuweizhang@chinadailyusa.com

 

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