Over the past few years, the share of private investment has grown, providing new channels for investment and enhancing its efficiency.

 

The Chinese economy will enjoy sound, steady development under the 13th Five-Year Plan, which goes into effect this year, scholars said at the 2016 China’s Macroeconomic Advanced Forum in Beijing on Feb. 25.

According to a forecast issued at the meeting by the Center for Macroeconomic Research of Xiamen University, China’s growth rate will decline more slowly over the next two years.
 

“Structural readjustment contributes the most to steady growth,” said Gong Min, deputy director of the center. She said restructuring efforts began to take effect after the international financial crisis.
 

Gong said the service sector is growing as a proportion of the total economy, providing a guarantee for employment. In 2015, the added value of the service sector accounted for about half of the national GDP, exceeding that of the manufacturing sector by 10 percent. Industrial restructuring has fostered job security amid slow economic growth, she said. More than 13 million jobs were created in 2015, exceeding estimates made at the beginning of the year by 3 million.

Over the past few years, the share of private investment has grown, providing new channels for investment and enhancing its efficiency. Improvement in investment structure will also sustain China’s steady growth, Gong said.

In addition, she said the transformation and upgrading of the manufacturing industry will improve productivity and raise incomes, giving China an edge in international competition.
 

Previous policies implemented to maintain steady growth will also have an effect in 2016, said Zhang Liqun, a research fellow from the Development Research Center of the State Council, adding that the economy will grow at about the same rate as it did in 2015.

Zhang said the driving force for steady growth has shifted from investment to consumption since 2012. With the help of government measures, including increasing employment, introducing targeted poverty relief and ensuring basic livelihoods, consumption has grown steadily, injecting fundamental vitality into the growth of the entire economy, he said, adding that the vigor will continue this year.
Supply-side reform, the focal point of economic work this year, will unleash dividends, scholars predict.

In this regard, the report recommends following the changes in the demand structure that have resulted from the increase in per capita income. It also suggests increasing new capacity and effective supply while phasing out outdated, excessive and ineffective capacity. It is necessary to increase investment in effective supply to expand total demand, thus stimulating exponential development in supply and demand, the report said.

 

Mao Li is a reporter at the Chinese Social Sciences Today.