Slow growth will test China''s new leaders: Economists
From K J M Varma
Beijing, Mar 24 (PTI) Economic slowdown will be a defining feature for China in the coming decade, testing the wisdom of its new leaders and shaping future diplomacy as the economy is expected to decelerate to 7.2 per cent in the next 13 years, top economists said today.
China''s economic expansion is expected to slow to a year-on-year average of 7.2 per cent between 2011 and 2025, Li Xuesong, deputy director of the government sponsored Institute of Quantitative and Technical Economics, Chinese Academy of Social Science (CASS), said.
During a presentation at the ongoing 5th World Forum on China Studies in Shanghai Li''s econometric models forecast slower GDP growth than the country''s 13-year low of 7.8 per cent in 2012.
"Optimistic calculations suggest growth at 8.2 per cent, while a pessimistic one suggests 7 per cent, between 2011 and 2015, and both figures will continue to decline over the next two five-year periods," Li said.
The downturn can be put down to slower growth of the labour force, weak inflow of foreign direct investment and the impact of a lackluster global economy, according to Li.
China''s GDP growth has entered a downward spiral since 2009 as the unfolding financial crisis dwindled external demands, a prominent engine behind the country''s fast-track development in past decades.
Experts said the economic slowdown may threaten social stability and cloud the pledges of President Xi Jinping, who came into office earlier this month, to restore social justice and close the wealth gap.
"I think the most immediate challenge for China is to make a successful transition from an export-driven economy to a consumption-driven one, which will turn on the true engines of China and the world economy," Gustaaf Geeraerts, director of the Brussels Institute of Contemporary China Studies, told state-run Xinhua news agency.
Geeraerts said a stumbling economy will weaken China''s ability to tackle other problems like environmental protection and political reforms.
Growing wealth, he said, can help nurture innovation and liberal minds that are conducive to social reforms. (MORE) PTI KJV