Current constraints won't deter China from achieving prosperity

LONDON - Despite difficulties in its economic growth, China will not change its development course toward prosperity, said Yao Shujie, an economist who also heads the Confucius Institute of the University of Nottingham.

"China has done well over the years despite many challenges. However, China is facing very tough constraints for future growth, " Yao told Xinhua in a recent interview.

They include "painful and slow re-structuring of existing industries, asset bubbles and inevitable housing market downturn, rising costs of labor and other production factors, depreciation pressure on the Chinese yuan, and loss of international competitiveness for traditional exports, lack of new growth triggers, and the like," he said.

However, "all these constraints will not deter China from moving ahead to build an all-round Xiao Kang (well-off) society by 2020 and to become an advanced economy by the middle of this century."

Yao said the current Chinese government is fully aware of these challenges and constraints, and it does not follow the previous expansionary policies which have generated asset bubbles and overcapacity.

It has focused on stable growth, employment, improvement of people's livelihood and the natural environment.

"In other words, growth quality, rather than quantity, is key to success which is based on sustainable growth and technological progress," he said.

Regarding China's economic "new normal" and its implications to the world, Yao highlighted: "People from outside should change their focus from low-value processing to high value-added and high-tech manufacturing and services in China."

He suggests that multinational corporations should not expect quick and easy profits; instead, they should invest in areas that will meet China's long-term development goals.