Sustaining new-normal growth
Updated: 2014-12-23 07:50
By Cai Fang, Li Yang(China Daily)
|
|||||||||||
Global slowdown makes businesses innovate
Structural slowdown is a key characteristic that defines the new normal, and this is expected to last a long time and it cannot be reversed by any policy.
There are several causes that have led to the new normal. As the manufacturing industry is almost saturated, increasingly more labor and other resources have flowed into the service sector, which has dragged down labor efficiency as a whole.
Besides, demographic dividends are diminishing with the aging of the population, thus pushing higher the cost of labor. The aging population has also caused a downturn in deposit rates and a slowdown in the growth of investable capital.
This situation has been made worse by China's lack of innovation. When China first opened up to the world over three decades ago, it followed a mode "with both ends overseas", namely importing advanced technologies to manufacture products, and then exporting the manufactured products to the world. As the technology gap between China and the West shrinks and its protection of intellectual property rights has improved, that mode no longer applies. The pressures put on the environment have also made it impossible to continue producing in the old mode.
It should be noticed that the new normal is a global concept, too. Global growth rates remain low, trade protectionism is on the rise and different economies are taking measures in their own interests.
Even international politics is affected. The global governance mechanisms, on which the modern world relies, no longer function well; relationships among major powers are being reshaped, and the supply chains are changing.
But the new normal does not necessarily imply recession, on the contrary, it contains huge potential and there are possibilities for fast development driven by new forces. The prerequisite for exploiting that potential is a total reform of the old mode of development, which compels China to boost innovation so that it is the main driving force of future growth.
That's also the necessary measure for China to jump out of the cycle of downturn and find a new path toward prosperity.
Li Yang, vice-president of CASS
Related Stories
Industrial output slowdown a 'new normal' 2014-12-22 11:47
Old investment remedy the treatment for China's "new normal" 2014-12-18 12:26
Time to seize China's 'new normal' opportunities 2014-12-15 09:55
Adapting to the 'new normal' 2014-12-13 08:04
Today's Top News
Pyongyang denies cyberattack on Sony
Nation to become net capital exporter
Beijing willing to assist Moscow
Australian PM denies cabinet reshuffle sign of desperation
Obama vows again to close Guantanamo prison
China revises 2013 GDP up by 3.4%
China-US economic talks conclude with fruitful outcomes
Ties between China and Oceanian countries enter new era
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
National Memorial Day for Nanjing Massacre victims |
Corrupt female officials spark debate |
Blue skies ready to greet APEC |
Growth pangs |
Sea change |
'Old newcomers' |