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Understanding the New Era of China’s Economic Development in Depth

Submit Time:29-03-2018 | Zoom In | Zoom Out

Author:Li Yiping | Source:People’s Daily (March 7, 2018)

Abstract:

While participating in deliberation with deputies from Inner Mongolia during the First Session of the Thirteenth National People’s Congress, Comrade Xi Jinping emphasized that China’s economy had been transitioning from a phase of rapid growth to a stage of high-quality development. If we still stick to the old mode of thinking, we can hardly find a way out and will lose good opportunities. This makes clear the key to promoting economic development in the new era. Transitioning from a phase of rapid growth to a stage of high-quality development is a basic feature of China’s development entering the new era. To bring China’s economic development to a higher level, we must understand and grasp this basic feature in depth, carry out innovation in our mode of thinking and model of development and make efforts to deepen supply-side structural reform. 

When reform and opening up began, China’s economic aggregate was small and the foundation was weak, but with huge space for economic development, low cost of factors and obvious late-mover advantage, China had objective conditions and environment for realizing rapid growth. Our Party timely and effectively used these favorable factors, propelled double-digit economic growth over a long period of time and made great achievements in development. With decades of hard work, China developed into the second largest economy in the world. Economic development is like human growth. If a phase of rapid growth is equivalent to the stage of growing taller in the course of human growth, then a stage of high-quality development is equivalent to the stage of getting strong and muscular. Through 40 years of reform and opening up, China’s economic development has entered the new era and the objective conditions and environment facing China have changed greatly. On the one hand, China is in a leading position in terms of economic and technological strength, defense capabilities and composite national strength, and the principal contradiction facing Chinese society has evolved. What we now face is the contradiction between unbalanced and inadequate development and the people’s ever-growing needs for a better life. On the other hand, problems such as the irrational economic structure, excessive low-end production capacity, tight restraint on resources and environment, declining population bonus and diminishing late-mover advantage have become obvious. We urgently need to adopt effective measures to solve outstanding problems and promote economic transformation and upgrading and sustained healthy development according to the requirements of high-quality development. 

To propel high-quality development, we must take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guide and deepen supply-side structural reform. Economic development is different from economic growth. Economic growth usually refers to growth in the economic aggregate, while economic development has more connotations. High-quality development includes not only improvement in product quality we usually talk about, but also industrial upgrading, product structure optimization, industrial layout rationalization, resource allocation optimization and improvement in marginal efficiency of capital for establishing a modern economy and enhancing the sustainability of economic development. Therefore, we must tightly grasp the main task of supply-side structural reform and improve the quality of development through raising total factor productivity and implementing the innovation-driven development strategy. Comrade Xi Jinping pointed out incisively: “In light of international experience, a country’s development should fundamentally rely on supply-side drivers.” To solve the underlying structural contradictions and problems in China’s economic development and promote high-quality development, we must rely on in-depth supply-side structural reform, keep expanding and strengthening the real economy, make great efforts to implement the innovation-driven development strategy, keep adjusting and optimizing the industrial structure and improving product quality, foster new poles of economic growth and truly realize better quality, higher efficiency and more robust drivers of economic growth through reform. 

The transition of China’s economy from a phase of rapid growth to a stage of high-quality development is a result of objective laws governing economic development, and promoting high-quality development is a requisite for adapting to the evolution of the principal contradiction in Chinese society, finishing the building of a moderately prosperous society in all respects and turning China into a great modern socialist country in every dimension. To promote high-quality development, we must free ourselves from the habitual thinking and practice of one-sidedly pursuing speed of economic growth and deeply realize that the traditional mode of purely pursuing speed of economic growth, not only unconducive to effective allocation of resources, but also unable to meet people’s need for a better life, has come to an end, so we must change the mode of development, eliminate backward production capacity and try to create institutional arrangements and conditions conducive to innovation and development in various aspects. Therefore, we should establish a scientific and rational indicator system, policy system, standard system, statistical system, performance evaluation system and administrative performance assessment system, really let the market play the decisive role and the government play its role better in resource allocation and keep improving the quality and efficiency of China’s economic development. 

(Author’s Employer: Renmin University of China)


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