Recently, “New normal” is a hot word about the Chinese economy. China maintained its high-speed economic growth over the past 30 years. The speed is slowing down and it is entering a new period now. “The China’s economic growth slowed to 7.4% in 2014, downshifting to a level not seen in a quarter century.” (Mark Magnier) In 2015, Li Keqiang, the current premier of China, said that the goal of the China’s economic growth is about 7%. Even though this speed is low, there are lots of reasons to keep in mind. In addition, we cannot only look at the rate of the economic growth but also look at other aspects of the economy.
Recently, Xi Jinping, the president of China, gave a speech talking about the slowing economic growth. With the development of Chinese economy, the volume of Chinese economy is growing and increasing. He thought that 7% is high and considerable on the basis of a large economy. In the past, China depended on increasing the input of essential factors in production to increase the GDP, using lots of lands, resources and labors. What China is focusing now is transforming from depending on putting large amounts of essential factors to technology and creativity. In the future, China needs to develop their economy with technology, not traditional labor and resources. This is a process of structural transformation. During this process, the speed needs to be slowing down in order to adjust properly.
Although the economic growth was 7.4% in 2014, the labor productivity increased 7% and Energy consumption per unit of GDP decreased 4.8%. (Phoenix Finance) The domestic consumption increased and the development of the service industry accelerated.
There is a large space for the industrial structures to upgrade. At present, most of the industries are low-end industries. It is beneficial to invest on developing those low-end industries to increase productivity.
“China Economic Growth Is Slowest in Decades” By MARK MAGNIER, LINGLING WEI and IAN TALLEY
Xi Jinping: now about 7 percent economic growth has been considerable increment, Phoenix finance