Decades of robust growth ahead, Chinese chamber delegates told

PUBLISHED : Thursday, 29 July, 2010, 12:00am
UPDATED : Thursday, 29 July, 2010, 12:00am

The mainland's robust economic growth will probably endure for the next 20 to 30 years as the country restructures to place more emphasis on domestic consumption and the environment, rather than focusing only on exporting and on accumulating savings.

That was the message from officials and experts at a ceremony to mark the 110th anniversary of the Chinese General Chamber of Commerce. Dai Xianglong, chairman of the National Social Security Fund, said the mainland's gross domestic product would probably grow by more than 10 per cent this year to reach US$5.5 trillion.

Beijing is determined to change its economic development model to be more environmentally friendly, as well as to encourage spending. It would bring plenty of investment opportunities for foreign capital, Dai, who is a former governor of the People's Bank of China, said.

Since Deng Xiaoping presided over the country's opening up in 1979, foreign investment on the mainland has topped US$1 trillion, the Ministry of Commerce said.

A sharp fall in overseas demand amid the financial crisis highlighted the danger of relying exclusively on exports. However, making mainlanders spend is easier said than done; at 51 per cent last year, the mainland has the highest savings rate in the world. The global average savings rate is 19.7 per cent.

Economist Fan Gang, chairman of the China Reform Foundation and a director of the National Economic Research Institute, was also bullish. 'China will remain an attractive place for manufacturers, as the cost of labour and land is still relatively low, even though coastal areas are getting more expensive.'

Even after 30 years of economic reform, the process was not finished, Fan said. The reform process would continue to provide huge impetus for national development.

'Reforming the mainland's tax and financial system, opening up the financial sector, cutting the costs involved in maintaining good relations with government, and breaking up some monopolies. These reforms will power the mainland economy and enable it to keep up the momentum it has had in the past 30 years for another three decades,' Fan said.

However, Fan warned about the growing rich-poor divide, saying increasing wealth was not evenly distributed and might cause social problems, hurting economic growth.

He said Beijing planned to provide basic health care to 95 per cent of the country's 1.3 billion people. 'Though it's very basic, it will do a great deal to ease social strains.'

Dai called for foreign investment into the medical, cultural, tourism and financial sectors. Despite recent attempts to cool the market, the property sector remained attractive, he said. 'The mainland is in the process of urbanisation, and there is huge housing demand in second- and third-tier cities.'