Structural reforms key to China’s GDP growth – report
September 18, 2016, 4:26 pm

China’s economy needs to undergo structural reforms with focus on innovation, a new report shows [Xinhua]

GDP growth for Q2 in 2016 was 6.7 per cent. While this is far lower than the hey day of just a decade ago when the growth rate approached double digits, it falls within government forecasts for the year.

Economic growth in the 30 years to 2010 averaged 9.9 per cent.

China’s National People’s Congress (NPC) in March ratified the country’s 13th five-year plan – a road map of economic and social development to 2021 – and set a framework for economic growth at a pace of at least 6.5 per cent.

The five-year plan places increasing focus on how to reform the country’s juggernaut economy as major industrialized nations face global recession and stagnation.

The plan also moves the economy into one that is consumption based (moving away from heavy reliance on exports) and market-driven.

By setting this goal, Chinese authorities will impose far less regulation on pricing products and services by 2020.

This will also empower local authorities in a bid to boost entrepreneurship and domestic innovation.

This is key, says Liu Fengliang, the author of the Renmin University report.

Innovation-driven development should be the core of China’s new growth impetus, he says.

He says there is a need for private investors to focus on modernizing agricultural techniques and manufacturing methods; these will fuel growth.

Liu also believes the financial sector is need of an overhaul where product standards are strengthened.

Chinese markets have been performing solidly in the second and third quarter so far. In early September, China’s National Bureau of Statistics (NBS) released a slew of data, which coupled with reports earlier in the week, showed that the economy is heading toward sustainable growth.

The BRICS Post with inputs from Agencies