Yi Xianrong

More concerns than cheers

By Yi Xianrong (China Daily)
Updated: 2010-08-10 07:57

Fortunately, the latest round of regulatory measures adopted by the State Council, which are aimed at turning the real estate industry from investment-dominated to consumption-oriented, will enhance the country's economic quality and reduce potential financial risks.

The uneven nature of economic development across different regions in the country has also added uncertainty to its economic quality.

China's remarkable economic achievements ever since the reform and opening-up policy have not fundamentally changed the prevalent dual economic structure between urban and rural areas.

On the contrary, the economic divide between urban and rural areas has widened and the proportion of the incomes of farmers and the rural economy in the wider national economy has been on the decline.

If such an unreasonable dual economic structure is not changed fundamentally, it will be difficult for rural residents to get an equal share of the prosperity brought on by the nation's fast economic growth.

Imbalanced economic development between the booming eastern coastal areas and inland regions has impeded the country's economic prospects.

China's uneven economic development is also reflected in the existing disparity in income distribution between different groups. Due to its ongoing transition from the earlier planned economy to a market economy, the role of the government and its intervention in economic activity is still widespread.

This has added to income disparity, with people having closer links to administrative power gaining more wealth and people on the opposite side gaining less. This trend will certainly hamper the nation's efforts at sustainable and stable growth.

A string of uncertain economic factors needs to be eliminated, and we should neither overestimate our country's economic status in the world nor purely use the GDP index to measure the country's economic weight.

From the perspective of per capita GDP and economic quality, China's economy is still at the mid-level of developing countries, and great effort is still needed to build up its economic strength.

What the Chinese people currently need most is to unceasingly reflect on existing problems to achieve better progress on the long-cherished road to national development.

The author is a researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences.

(China Daily 08/10/2010 page8)