Economy

Next decade is China's golden period of development

By Li Daokui (People's Daily Online)
Updated: 2010-08-03 10:50

If China's five principal energy-consuming industries are renewed or upgraded to the relatively advanced levels, the nation may save at least 10 percent fuels and reduce at least 10 percent carbon dioxide emissions a year. This will in turn boost a new round of investment and, if the annual energy production capacity is lifted by 5 percent, the nation's gross domestic production (GDP) growth will pull or increase by 2.5 percent.

The fourth factor is China's public fiscal health development, which has a spacious room for the implementation of the government-led transition policies. I have personally estimated the Chinese government assets to be approximately 120 percent of the nation's GDP, whereas the government debt accounts for about 80 percent of the GDP. So, cash flows do not have any problem and the space for fiscal maneuvering is ample enough and, if with a slight loosening or relaxation, there will be a very great impetus to Chinese economy.

These four factors have told us that China's potential for the future economic growth is immense. The premise, however, is that the government policies should be more proactive and some of its regulatory measures be greater and more intensified, so as to render people more tangible or substantial benefits.

Some people, however, note that Chinese economy will have a bottleneck of an ageing population in the next 10 years or so with a deficient labor force supply because China will not only lower its growth rate but its asset prices will also shrink significantly. Nevertheless, I cannot agree to this viewpoint. To me, I do not take the ageing of population a tough issue as China's population dividend has not ended yet. If China encounters a possible population ageing bottleneck over the next decade, it is owed to unreasonable institutional arrangements, which constrain the work enthusiasm of some people who are slightly advanced in age, and I'm sure that some sort of reform would help resolve this issue.