Changing growth strategies

Source:

03-14-2006 17:44

China's economic output quadrupled in the last two decades of the twentieth century. But the massive growth came at a cost, including excessive energy consumption and environmental pollution. The pursuit of a more efficient and sustainable growth pattern is one of the major focuses of the Chinese government in its effort to double the country's GDP by 2020.

Working at full capacity...This scene prevails at coal mines across the nation, large or small. They have the same task - to produce as much coal as possible, to feed an increasing demand for power in one of the world's fastest growing economies.

China accounted for more than one third of the world's total consumption of coal in 2004. The country is also the world's biggest consumer of other important resources, such as steel, alumina and cement. But despite this massive consumption of resources, China's GDP accounted for only 4 percent of the world's total.

Zhang Junkuo, senior research fellow, State Council Deve. Research Ctr., said: "Our economic growth has relied heavily on consumption of energy resources. If such a model does not change, we will not be able to sustain our growth, and our living environment will be unendurable."

Policy-makers have acknowledged the urgent need for change, and the central government has put transforming growth methods high on its agenda.

The aim is to shift a development pattern that relies heavily on investment and consumption of resources to one driven by efficiency and productivity.

Zhang Junkuo said: "The fundamental reason behind our inefficient mode of economic growth is the existence of serious flaws in our economic mechanism. As such, to change the growth mode, the key is to reform that mechanism."

Economists have identified four major "flaws" which have resulted in the blind pursuit of GDP growth and wasteful use of resources, such as water and land.

Economist Wu Jinglian said: "The four obstacles are the excessive power of governments at all levels in distributing resources, the pursuit of "political achievements" by some officials, the pressure of taxation and financial revenues on industrial output, and the distorted pricing system for key means of production and resources."

Concrete measures are expected to be introduced to correct these problems. One with great significance is the decision to chop down energy consumption per unit of GDP by 20 percent over the next five years. This is the first time the central government has set requirements in energy-efficiency along with its target of GDP growth.

China's top policy-makers have demonstrated unprecedented determination in accelerating the change of the mode of economic growth. Whether or not this huge task can be accomplished will be critical for the country's economic miracle to continue to shine.

Editor:Wang Ping