People’s needs have potential to fuel growth

17 january 2013

China has yet to unlock the full potential of its population, a development that could translate into further industrialization and urbanization that would sustain another 20 years of robust growth, a high-profile trade expert said on Tuesday.

 

The aging and undereducated population, if its needs are well-managed, could bring about massive business opportunities and significantly enhance the competence of the labor force, said Long Yongtu, former vice-minister of foreign trade and economic cooperation, who led the delegation on negotiations for China’s accession to the World Trade Organization.

“Currently, a pressing task is to put quality-of-life issues ahead of short-term economic growth and attend to the welfare of citizens,” he told China Daily in Shanghai.

According to Long, China may still boost its competitive edge in a skilled workforce for the coming decades because the country is devoting a lot of resources to universities and vocational education.

Meanwhile, there also is a soaring demand for nutrition, healthcare and entertainment of the elderly, bringing much cheer to businesses and relevant industries.

“To transform from volume to quality is therefore imperative, as a strong demand at home is viable thanks only to a brighter outlook for jobs and income growth,” he said.

Despite the lingering economic slowdown, many experts and business leaders still have an upbeat assessment of China’s business prospects on the premise of the focus that Beijing has put on economic rebalance.

At the 2012 Global CEO Conference in Shanghai, Liu Chuanzhi, founder of China’s largest personal-computer maker, Lenovo Group Ltd, said waiving taxes and improving the well-being of migrating city dwellers is critical to sustainable development.

Ding Ningning, a research fellow at the Development Research Center of the State Council, also believes the government should adjust many of its basic economic policies to bolster growth, such as the one on real estate.

“For instance, restricting the purchase of additional apartments, which puts a lid on housing prices and on sales, is little more than a stopgap measure, giving the government time to implement more effective measures. But it should come up with practical plans to allow university graduates and migrating city dwellers to settle down because they are the ones who drive up spending the most,” Ding said.

Edward Clarence-Smith, representative of the China office of the United Nations Industrial Development Organization, said the Chinese government has lessened its dependence on GDP growth and paid more attention to industrial upgrading and environmental protection.

And the green-growth trend is in effect an indispensable part of stimulating domestic consumption and industrial modernization, he said.

“Companies that want to be green cannot do it alone. There will be a need for them to have some supporting infrastructure in going green, and that, in turn, will bring about more value-added businesses to the economy,” he said.

For instance, to move up the value chain, industrial activities need specialized companies that can build recycling plants and anti-air pollution systems, as well as consultants who understand the green concept and can help them design and work through all these, therefore nurturing a green industry.

Zhang Yue, founder and chairman of Broad Group, said his company encourages employees to walk or ride bicycles to the office by giving out 600 yuan ($96) per month as an incentive.

Li Yizhong, former minister of industry and information technology, said: “It is tortuous that we consume over 20 percent of the world’s energy while contributing to just 10 percent of the overall GDP. We should filter out the unhealthy side of GDP growth.”