• Wed
  • Aug 20, 2014
  • Updated: 2:58pm

'Transition to market economy must continue'

PUBLISHED : Tuesday, 28 February, 2012, 12:00am
UPDATED : Tuesday, 28 February, 2012, 12:00am

The mainland has reached a 'turning point' after three decades in which gross domestic product growth averaged 10 per cent a year, and now needs to complete the transition to being a market economy in order to establish itself as a high-income society, according to a report jointly issued by the central government and the World Bank yesterday.

The report, 'China 2030: building a modern, harmonious and creative high-income society', said Beijing should carry out enterprise, land, labour and financial reforms as part of its attempts to create a new structure for economic growth.

'The country's current growth model is unsustainable,' said World Bank Group President Robert Zoellick, who is on a three-day visit to the mainland. 'China's leaders have recognised that the country's growth model, which has been so successful for the past 30 years, will need to be changed to accommodate new challenges.'

The report was backed by Vice President Xi Jinping and Vice Premier Li Keqiang, who are expected to succeed the current leaders during a major power reshuffle that will take place at the end of this year.

The report, by a team from the World Bank and the Development Research Centre of the State Council, forecasts the mainland will become the world's largest economy before 2030, though it needs to strengthen its private sector, open its markets to foster competition and innovation, and ensure equality of opportunity.

It said the mainland faced challenges posed by an ageing and shrinking workforce, rising inequality, environmental stress and external pressures.

Prominent mainland economist Mao Yushi said he agreed with the report, adding that these problems needed to be addressed at once: 'We can't wait for 20 years.'

The mainland has adopted pro-market reforms over the past 30 years with breathtaking results: more than 500 million people have been lifted out of poverty and it is now the world's second-largest economy.

However, other problems have emerged: a widening wealth gap, worsening pollution, low energy efficiency and heavy reliance on exports. Mao said the major resistance to change was from vested interests. 'They will not give up the privilege they secured from monopolies.'

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