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Business / Economy

China's reform inspires fresh vigor in economy

(Xinhua) Updated: 2014-03-07 22:32

BEIJING -- The new Chinese government achieved a steady yet impressive start last year, and some remarkable new economic achievements were made as the country pushed its comprehensive reform into high gear.

First, China has maintained its economic growth target for 2014 at about 7.5 percent, the third consecutive year the government has targeted that figure.

China's economy grew by a robust 7.7 percent in 2013, one of the strongest performances globally. Amid slower growth and weak market demand globally, China contributed nearly 30 percent of global growth by striking a balance between its economic growth speed and growth quality.

China's reform inspires fresh vigor in economy

 2014 Two Sessions

"China is a hero in the recent economic recession. If China hadn't been there, that recession could be much worse for Europe and for the United States," said Eric Maskin, the Nobel Economic Prize Laureate and professor at Harvard University.

Maskin said the economic reform agenda outlined by the Chinese government late last year was heading in the right direction, pointing out that growth rates of 9 or 10 percent could not last forever, no matter what kind of policy China adopted, because the country had reached the point where it was no longer so much in "catch-up mode," but at the productivity frontier.

Secondly, China's economic growth became more quality-oriented as the country's consumption surpassed investment for the first time to become the largest contributor to the economy's growth.

This year's government work report showed China will make domestic demand the "main engine" of growth, and will focus on boosting consumption in working to increase domestic demand.

The government also vowed to enhance people's ability to consume by increasing their income, improve consumption policies and fostering new areas of consumption.

Steven Barnett, a division chief in the Asia and Pacific Department of the International Monetary Fund, said boosting consumption was all about achieving economic rebalancing.

External rebalancing was the export side of the story, and the domestic rebalancing was about consumption, Barnett said.

The rebalancing would be achieved if the third plenum reforms could be successfully implemented, Barnett said. "The reforms will achieve a good byproduct of successful rebalancing."

China's reform inspires fresh vigor in economy China's reform inspires fresh vigor in economy

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