Sustainable growth is in dire need for China

A Chinese worker directs a crane to lift reinforcing steel rods at a steel plant in Huaibei city, East China's Anhui province, Jan 20, 2015. [Photo/IC]

After three decades of double-digit growth, China has embarked on new development track with moderate growth rate around 7 percent annually. Even at this conservative growth rate, the Chinese economy could double itself in seven years to a US$20 trillion economy. It could be regarded as miraculous growth for a huge economy.

China has arrived at a point where rapid economic growth becomes a big challenge and risk overheating. In fact it was the fear of overheating that prompted the Chinese government to rein in the high growth rate.

China has little to fear of external factors dragging down its economy that is built on a very broad base of economic activities, from agriculture to manufacturing, tourism and finance etc. China has a lot of rooms to grow, and to continue growing at the new normal of a mature or maturing economy at 5 percent to 7 percent is not an issue.

The big question is whether China wants to push so hard to continue with its past growth rate of more than 10% or to take a breather and grow at a more leisure pace of 7 percent?

The last three to four decades of heady growth naturally led to many inequalities and inefficiencies in the Chinese economy like unequal distribution of wealth, unequal rate of growth across region, unequal growth in different industries and priorities. The inequalities itself would present great challenges but also opportunities for the Chinese economy to continue to grow as it seeks to level up these inequalities, diversify its industrial and manufacturing base, bringing growth and development to less developed regions and industries.

The obvious and often touted strategy to sustain a high growth rate is to steer the export oriented economy to raising internal consumption of consumer goods and services. The sheer size of 1.3 billion consumers, far more than the combined market of the US and Europe, would keep the Chinese manufacturers and producers very busy for a long time to come. China can be a self sufficient and domestic driven economy with the advantage of size.

There are also many industries that are still growing, such as the defense industries, pharmaceuticals and the redevelopment of the central and western regions of China. There are also many new industries such as renewable energies that could become the new engines of growth to keep the economy happily rumbling, albeit at a more sustainable and respectable growth rate.

And the banking and finance industry is just opening up and with great potential to contribute a bigger share to the economy.

The issue of the Chinese economy is not about growth but about sustainable growth, about managing growth for the good of its people, better distribution of wealth to uplift the well being of the population, to spread growth to all corners of the country.

The break-neck speed of the past decades of double digit growth should be tempered with more control in the direction of growth, in being selective of the industries to grow, in capitalizing on the green revolution, to turn green and the use of green technology.

China should take this opportunity to transform the economy and country into a country of the new century with measured and manageable growth, with a clear purpose and direction.

The author is a political observer from Singapore.

The opinions expressed here are those of the writer and don't represent views of China Daily website.