Sustainable economy on the horizon

2017-12-18
China Daily

China’s pursuit of high-quality development, which is expected to be discussed at this year’s Central Economic Work Conference, means the country will shift toward a more sustainable and intensive way of expansion that will contribute to global prosperity, analysts said.

In the report that he delivered to the 19th National Congress of the Communist Party of China in October, Xi Jinping, general secretary of CPC Central Committee, said the world’s second-largest economy was evolving from the phase of a high rate of growth to the stage of high-quality development.

At a more recent high-profile meeting, Xi, also China’s president, said the country will address three major tasks next year, namely targeted poverty reduction, pollution control and preventing major risks.

Participants at the annual tone-setting Central Economic Work Conference, reported to be held this week, are expected to discuss high-quality development, which is crucial for China’s next-stage development, analysts said.

“China’s strategy now is to shift to more intensive rather than extensive growth and that transition will deliver more prosperity, both in China and abroad,” said Fredrik Erixon, director of the Brussels-based European Centre for International Political Economy.

John Litwack, World Bank Lead Economist for China, said: “We at the World Bank have high expectations for the Central Economic Work Conference. We expect that the focus will be on a specific policy and reform framework that will echo the priorities expressed at the 19th National Congress of the CPC in October.

This includes a stronger emphasis on the quality, as opposed to quantity, of growth and the mitigation of macroeconomic risks.”

To improve quality of growth, China needs to work on a series of systemic arrangements to facilitate achievement of that task, he told China Daily.

“We would, therefore, expect more emphasis on policies and programs to achieve deleveraging, greater efficiency in the public sector, a cleaner environment, improved public services for the population and a stronger business environment.”

Apart from dealing with economic sustainability, high-quality development also means socially and environmentally sustainable development, said Yukon Huang, senior fellow of the Asia Program at the Carnegie Endowment for International Peace.

“Having reached upper-middle-income living standards, the 19th National Congress of the CPC rightly shifted the emphasis toward quality, and by quality, the leadership is emphasizing the need to make the growth process more socially and environmentally sustainable.”

Huang said China’s shift to a more sustainable and socially sensitive growth path has been underway for many years. “But now I sense a more concerted effort to address these issues.”

Analysts also said China’s shift to focus on dealing with the three major tasks next year will help improve its ability to innovate.

China’s approach to address major risks, poverty and pollution, “could set a global standard for using the major challenges of our time as drivers for innovation”, said Dennis Pamlin, senior adviser at the Research Institutes of Sweden. “With this new initiative, China could actually shift the global innovation focus.”