Restructuring while maintaining high growth

Though the financial industry had been affected by the decline in the stock market, the contribution of tertiary industry to GDP accounted for 51.4 percent, with 2.3 percent increase compared with the same period of previous year and it is 10.8 percent higher than the contribution of the second industry.

To sum up, it does not means economic problems that the growth rate of GDP is slightly less than seven percent. Instead, the economy continues a translation towards a healthier economy growth mode.

However, some economists' concerns about the Chinese economy are not incomprehensible.

Besides China's huge economic scale, the economy has a very different structure (at least from the Washington Consensus), which makes it is difficult to decode.

Many economists suppose that with extensive government's inefficient intervention in the economy, the high speed economic growth is not sustainable. Some believe that the economic crisis is on the way.

No wonder that a sudden decline in the yuan exchange rate recently makes many economists think that Chinese economy is experiencing serious difficulties.

The worries may arise because of neglects of China's economic growth stage and market features.

China's per capita GDP in 2014 was about $7,589, while the per capita of the United States was $54,597, which was 7.2 times of China's. China is not a wealthy community. But it has an advantage of a huge unified market.

In this context, the central government needs sufficient resources to solve two problems: one is to enhance the unified market, the other is to balance development of different regions.

At this stage, the society need rapidly improve its infrastructure and basic industrial facilities. Since the products, such as mining industry, transport, telecommunications and electricity, are standard products with mature technology for the stage, it can be regarded as an efficient choice that these products are uniformly provided in the whole country by State-owned enterprises.

Now China has equipped the market with fine infrastructure, it is time for government to retreat from competitive industries and switch its role from a production-oriented government to a service-oriented one.

Chinese are still not rich and they are hard-working people with full of longing for a better life, which means a great potential for economic growth. With such a huge unified market, as long as the restructuring of economy steadily continues, we would remain optimistic about its economic growth.

The author is a lecturer in the Management School of the Shanghai University and a research fellow at the China Europe International Business School Lujiazui International Finance Research Center. The views do not necessarily reflect those of China Daily.

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