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China's economy will grow, but has a long way to go

By Yang Xi: 0 Comment(s)Print E-mail China.org.cn, September 12, 2012

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Professor Justin Yifu Lin, former World Bank chief economist. [File photo]

Although the Chinese economy has showed signs of slowing down over the first half of this year, Chinese economists are still optimistic about the nation's future economic growth. They do however continue to stress the major issues the country has to cope with.

Over the past 30 years, the Chinese economy has experienced a rapid and sustainable growth. During the Sumer Davos, held in Tianjin from Sept. 11 to Sept. 13, Professor Justin Yifu Lin said that the world's second largest economy will realize an 8-percent GDP growth over the next 20 years if it continues its technological modernization and adjusts its resource allocation.. Lin is a professor with the National School of Development at Peking University.

China shows great potential for rapid economic growth over the next 10 years, considering that its GDP per capita accounts for only 18 percent of that in the US, and there are still a lot of poverty-stricken regions in China, said said Li Daokui, director of the Center for China in the World Economy (CCWE), during the Summer Davos.

However, the Chinese economy still faces many challenges, such as the pressure of anti-dumping activities from the U.S. and European Union, a slowdown over the first half of the year, as well as a deteriorated international economic and political environment, explained Li.

The slowdown of the Chinese economy over the second half of this year indicates that the country's export markets are weak and investment demands are insufficient, said Justin Yifu Lin.

“Boosting infrastructure investment around the world will not only contribute to creating more job opportunities and high economic growth in developing nations, but also help expand exports and improve employment rates in developed countries, Lin suggested.

In order to realize sustainable economic development in the future, China should establish a legal foundation of the socialist market economy as well as an efficient welfare system, including a solid healthcare service and housing system, said professor Li, the country should also rethink its role in the world and have more dialogues and communication with foreign countries to create a better international environment.

In a bid to reboot the economy, China' National Development and Reform Commission (NDRC) has recently approved dozens of infrastructure projects for highways, ports, railways, sewage networks and waste treatment plants, worth more than $150 billion in total.