Q: The Chinese economy has maintained a momentum of
rapid growth while many other economies in the world have slumped.
As far as China is concerned, what are the reasons behind such a
contrast? Will China continue to maintain such strong
momentum?
A: The growth of the world economy has slowed down in general
since the 1980s, especially after we entered the 21st century when
it registered an average annual growth rate of only 2 percent. In
comparison, China's annual economic growth rate has been more than
7.5 percent on average. This phenomenon have attracted people's
attention and led them to explore why such a big gap exists.
Reviewing China's development over the last two decades, we can
conclude that the following five factors have sustained the
country's rapid economic growth:
First, China started to implement the policy of reform and
opening up to the outside world at the end of the 1970s. As a
result, obstacles to economic development under the traditional
planned economy were eliminated and productivity fully unleashed.
In the meantime, China adopted a step-by-step approach in pushing
the reform forward, striking a balance between the reform,
development and social stability are properly tackled, which has
guaranteed a stable, sustained and rapid economic growth.
Second, China has compiled middle- and long-term development
plans every few years according to the characteristics and needs of
different development phases. This has helped sustain the stability
and continuity of China's economic growth.
Third, with the deepening of the reform and opening up and by
solving increasingly complicated issues China has encountered both
at home and abroad, the country has become more experienced in
economic macro control. Through expanding domestic demand, China
successfully alleviated the pressure of deflation during the Asian
financial crisis in the late 1990s, and fended off other adverse
effects.
Fourth, China has attached great importance to the making of
coordinated policies in market-oriented forms, which has not only
created the necessary conditions for a sustained, stable and rapid
growth, but has also promoted social equality and progress.
Fifth, upholding the policy of opening to the outside world,
China has enhanced international economic and technical cooperation
and vigorously taken part in international market competition. As
the reform and the open policy continue, the country's foreign
trade is experiencing a structural transformation. The rapid growth
in foreign trade has become an important driving force of China's
economy.
Despite China's fast economic development, the general level of
the economy still remains low and the country has a long way to go
to realize industrialization and modernization.
According to the predictions of the Development Research Center
of the central government, the annual growth rate will be sustained
at about 8 percent between 2006 and 2010; the speed of growth will
slow down between 2010 and 2020 to around 7.
Positive factors to sustain China's future growth include better
infrastructure and technical conditions, an optimized industrial
structure, a more competitive manufacturing industry, a broad
domestic market with huge growth potentials, the deepening of
structural reforms and the improvement of the investment
environment. We have all the reasons to believe that China's strong
growth momentum can be maintained in the next 15 to 20 years.