Opinion | The dangerous cost of China’s debt-fuelled growth: delays to much-needed structural reforms
Cary Huang says the on-target first-quarter GDP growth figure is the result of government stimulus measures, including massive lending and construction projects, not the hoped-for switch to consumption and service industries
The relationship between economic growth, the achievement of a sustainable future and human well-being has long been at the centre of the debate over China’s development.
So while policymakers might feel relieved to see that the 6.7 per cent growth figure in the first quarter was within their target of 6.5-7 per cent for the year, economists have more to worry about. Such growth is, after all, just an indication that China is repeating an old path that has led to many of the problems the economy currently faces.
The government is tasked with managing an economic transition from a pattern of growth based on the rapid expansion of industrial output, exports and investment to one more driven by private consumption and service industries.
Five trillion reasons for China to push ahead with economic reforms
But the newly released data suggests otherwise, as growth has been largely achieved on the back of government stimulus which includes massive lending and the jump-starting of major construction projects.