Strong China growth forecast to last
STRONG economic growth is expected from China well into next century, according to a new report from Goldman Sachs Asia.
The report says an abundant, well-educated labour force and high levels of personal savings and investment would provide the cornerstones for the country's economic growth beyond 2000.
'Most importantly, the Chinese leaders' reform commitment will mobilise these favourable factors into more productive use and liberate the Chinese people's entrepreneurial spirit.' Shan Li, executive director and China economist with Goldman Sachs said in his report that important challenges for the country lay ahead.
These included questions about succession, the resolution of tensions between provincial and the central governments, control of the widening income inequality, growing unemployment, corruption and the reform of state-owned enterprises.
'These [challenges] must be successfully met if China is to continue on the current favourable development course,' the report said.
However, he warned that things could go wrong for China if it were not careful.
Sketchy action plans, incomplete policy guidelines and vague timetables were areas which the government needed to clarify if it hoped to control the social and political tensions on the mainland.
Mr Shan said the focus on the short-term cyclical behaviour of the Chinese economy was clouding its excellent long-term prospects.
His report said China would need to achieve annual gross domestic product growth of between eight to 10 per cent for the next three decades if it hoped to approach real per-capita income levels of newly-industrialised economies.
The report concluded that this was 'well within China's reach'.
'The Chinese economy and society are undergoing particularly rapid transformation,' Mr Shan said in his report.
'It is unrealistic to expect Chinese leaders to spell out future contingencies.
'China's successful reforms give us confidence that the country's economic boom is most likely to continue into the next century.'