With the new round of reform and opening-up as well as the transition and upgrading being pushed forward, the economy is capable of transforming its growth engine, escaping the middle income trap, and smoothly entering a period of medium-to-high growth during the new normal.
The comprehensive and deepening reform will continue to unleash huge dividends. Reforms that improve the efficiency of economic growth, encourage technological progress and innovation, as well as cultivating innovative talents, will enable the potential growth rate of the economy to remain at a medium-to-high level in the coming five to ten years.
The new type of urbanization will effectively expand space for economic growth. As the urbanization drive continues, it will create huge investment and consumption markets, generate demand for a large quantity of public goods and services, thus producing a sustainable engine for economic growth.
The improved opening-up will inject new momentum into the economy. The Belt and Road Initiative and free trade zones will help to increase the vitality of the economy and facilitate interaction between the domestic economy and the global market.
The establishment of the Asian Infrastructure Investment Bank, the Silk Road Fund and the BRICS New Development Bank, and efforts to support manufacturing exports will also promote the implementation of the “going global” strategy, thus cultivating the new engine of economic growth.
In the mid and long-term, China’s reform and opening-up as well as the new type of urbanization, will generate a series of new engines for economic growth, including the real estate industry, the transformation of the automobile sector, deepening infrastructure construction, accelerating outbound infrastructure investment, growing consumption demand and private investment driven by mass entrepreneurship.
Together with the improved productivity brought by innovation-driven and structural reforms, the economy will grow continuously both in terms of demand and supply.
Therefore, in the future five to ten years, the economy is capable of keeping its growth rate at a medium-to-high level.
The story is based on an article by Lian Ping, chief economist with the Bank of Communications.