|China's economic structural change to stoke Asia-Pacific growth|
China's deepening economic structural reforms will help unleash new growth potential in Asia Pacific and create abundant opportunities for other APEC members.
The 12th Five-Year Plan, which charts China's development over the next five years, calls for deepening the country's economic structural reform by shifting its export and investment-led growth model to one driven by technology and domestic consumption.
Guided by the plan, China is implementing effective measures to upgrade its economic structure, boost domestic demand and develop a green economy to achieve win-win cooperation with other economies, including those in the Asia Pacific region.
UPGRADING ECONOMIC STRUCTURE
For a long time, China's growth has been mainly driven by exports of low-end manufacturing. Experts say the growth model would not be sustainable in the long term.
"The very labor-intensive process of manufacturing export will eventually die off. They will be replaced," said Nobel Economist Michael Spence from Stanford University. "It does not mean that China will not export any more, but that will be relatively high value-added export."
To achieve high value-added exports, China has been vigorously boosting scientific and technological innovation and encouraging enterprises to become major players of such innovation, providing them with better legal system for intellectual property rights protection.
Against the background of the global financial crisis, an upgraded Chinese economy, the second largest in the world, would help pull the rest of the world out of recession faster and ensure a stable, balanced and sustainable global economic growth, experts said.
At the recent Asia Pacific Economic Cooperation leaders's meeting held in Hawaii, Chinese President Hu Jintao pledged to honor China's commitment to growing a green economy and promoting the conservation culture.
He said that from 2011 to 2015, China's investment in the environmental sector will double that of the previous five years to about 3.1 trillion yuan (about 488.5 billion U.S. dollars).
China's booming green industry is not only generating large domestic demand, but is also a key area for foreign investment and high-tech imports, experts said.
Meanwhile, China's push on improving economic quality will keep its growth more sustainable, which means more opportunities for the world will continue for a longer time, said Wang Jun, a macro-economic researcher with the China Center for International Economic Exchanges, a government think tank.
BOOSTING DOMESTIC DEMAND
To shift economic growth to one that is driven by domestic consumption, the Chinese government needs to implement policies that increase people's income and release their consumption potential.
The policies would likely focus on continued urbanization, improvement of the social welfare system, reform of the income distribution system, and revitalization of small and medium-size enterprises, experts told Xinhua.
The Chinese government has both the tools (policy flexibility) and raw materials (abundant liquidity) to enact this structural shift, according to Nick Timberlake, an analyst with the HSBC.
Boosting China's domestic demand also means a larger market for foreign products and more jobs for its import source economies.
In the first three quarters of 2011, China's GDP grew by 9.4 percent year-on-year. Total imports amounted to 1,285.17 billion U.S. dollars, up 26.7 percent. Trade surplus as a percentage of GDP decreased from 7.5 percent in 2007 to 3.2 percent in 2010.
The figures showed that there is a better balance between domestic and external demands in driving China's economic growth.
In the coming five years, China's imports are expected to exceed 8 trillion U.S. dollars, which will be a major contribution of China to the global economy, including the Pacific Rim.