China heading for a more balanced economy
- By Zhang Lijuan
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E-mail China.org.cn, March 8, 2014
China is a unique economy in terms of its growth model. Orthodox economic theory has provided few guidelines for policymakers in making China's economic reform decisions. For example, despite a sharp slowdown during the last two years, China still has two strong factors in its macro-economy: sufficient public revenue and high productivity per worker. These two factors, if they continue to work well, can serve as critical anchors for China's further economic reform. They may also help the Chinese economy avoid a hard landing.
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[By Jiao Haiyang/China.org.cn] |
![[By Jiao Haiyang/China.org.cn]](http://images.china.cn/attachement/jpg/site1007/20140307/001ec949c22b1483b13416.jpg "[By Jiao Haiyang/China.org.cn]")
On Feb 24, China's National Bureau of Statistics released its 2013 economic development data. China's productivity continued to grow steadily in 2013. China's public revenue increased 10.1 percent in 2013, which was much higher than the GDP growth of 7.7 percent during the same period. China's foreign reserves reached US$3,821 billion, an increase of US$509.7 billion from 2012.
2013 marked a new beginning for China. It seems to be entering a new stage in its economic development. It is still too early to define China's further economic reform, because no fundamental changes emerged in last year's macro-economic variables. The central government is determined to give away some of its authority to the market, but the question now is, how can these institutional changes be implemented?
Debates and arguments over China's future growth have gone on since the 1980s. Last year's economic slowdown altered the entire world's view about China's economic reform. Along with the upcoming sessions of the National People's Congress, the world is expecting new decisions that will drive China's future economic development.
Given that China is a transition economy, there is much to expect. Financial liberalization was an ice-breaking reform last year. The new administration launched the Shanghai Pilot Free Trade Zone last year in the hope of driving China's transition from a manufacturing-based economy, represented by the launch of Shenzhen Special Economic Zone in the 1980s, to a service-based economy.
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