Compared with various economic quotas of
developed countries, China still falls far behind, but there
is much room for its economic growth.
Figures listed by Xu Xianchun, an official with
the National Bureau of Statistics, indicate that there is
much room for China's economic development.
--In terms of the
per-capita GDP, which reflects the level of affluence of a
country and the people's living standards, China ranks 140th
in the world, although the global ranking of its aggregate
economy comes sixth. In 2000, China's per-capita GDP
averaged US$856, which was equivalent to 2.29 percent of'
that of Norway, the champion; 2.32 percent of Japan, the
runner-up; 2.44 percent of the United States that ranked
third; and 2.49 percent of Switzerland that came
--In terms of industrial structure, the tertiary
industry of the United States takes up more than 70 percent
of its GDP, while the rates of Britain, France, Germany and
Japan have all exceeded 60 percent. The rate of China only
stands at around 33 percent.
--In terms of consumption demand, which
is in direct ratio to economic development, the consumption
rate (the proportion of consumption in the GDP) of the
United States tops 80 percent and its investment rate is
less than 20 percent, while the consumption rate of China
only slightly exceeds 60 percent.
handling of the problems related to farmers and rural areas
will boost the development of the national
China's rural areas have the biggest
room for economic growth. Of the 16 basic monitoring quotas
for a well-off society set by the Chinese Government in
1991, three had not reached the required standard 'by 2000.
These include the per-capita net income of farmers,
per-capita daily protein intake of farmers and the
proportion of counties meeting the requirements for the
rural elementary health care system. Since all the problems
concentrate in rural areas, will the agricultural sector be
a drag on China's effort to quadruple its GDP by
Chen Xiwen, deputy director of the State Council's
Development Research Center, assured that if the rural
surplus laborers can transfer to other sectors and if the
non-agriculture income of farmers can increase year by year,
the agricultural sector, instead of hindering the
development of the national economy, would become a positive
factor to ensure economic growth.
According to Chen, the GDP
of the United States, Japan and some other developed
countries was doubled in less than 10 years after it had
reached USS1,000 billion. The circumstances of China,
however, greatly vary from those of these countries after
its GDP hit USS1,000 billion. First, while the majority of
the people of these countries live in cities, nearly
two-thirds of the Chinese people live in rural areas.
Second, in terms of the ratio of agriculture in the GDP,
that of Japan and the United States is less than 10 percent
and less than 6 percent respectively, while that of China is
The high proportion of rural
population and the high ratio of agriculture in the GDP are
both advantageous and disadvantageous to China's fulfillment
of the goal of quadrupling its GDP by 2020. As the growth
rate of agriculture is lower than that of the secondary and
tertiary industries, the high proportion and slow growth of
agriculture make limited contributions to the growth of the
GDP. However, the proportion of agriculture in the GDP will
decline gradually along with the steady development of the
national economy. Large numbers of farmers will migrate to
cities and towns, which suggests fairly great potentials
exist for the growth of secondary and tertiary
To maintain the momentum of sound development, the
employment of rural population should be handled properly.
If the problems related to the employment and income of
farmers are not well handled, the rural areas can hardly
maintain stability and the tremendous potential for
consumption in rural areas cannot be tapped.
The process of
urbanization should be quickened, in order to solve the
problems of farmers and rural areas and explore room for
further economic development. According to Chen, Chinese and
foreign scholars have reached consensus that the Chinese
economy has three growth points in the 21st century--new and
high-tech industries, development of the western region and
urbanization. How big is the room for urbanization?
According to calculation, the per-capita investment is at
least 40,000 yuan for completing a town with a population
between 40,000-50,000. Take Longgang town in Wenzhou City,
Zhejiang Province, for example. The predecessor of the town
was three fishing villages with a combined population of
3,000. A total of 7 billion yuan was invested in the
construction of the town, which began in 1984. The current
population of the town has exceeded 120,000. "It will
be an amazing achievement if China can create several
thousand towns like Longgang," said Chen.
persistence in reform and opening-up provides important
guarantees for preventing the drastic fluctuation of the
China enjoys good prospects
for economic development. Between 1978-2002, the Chinese
economy kept a high average annual growth rate of 9.5
percent. Will the momentum of rapid growth be maintained in
the coming 18 years?
The history of
the development of Japan and the "four small dragons in
Asia" shows that the growth rate of all these countries
declined to varied extent after experiencing a high growth
rate of around 9 percent for 20 years. The annual economic
growth rate of Japan plummeted to only 2.81 percent between
1973-2000. Singapore, the Republic of Korea and China's
Taiwan Province continued to maintain a relatively high
annual growth rate of 7 percent, 5 percent and more than 6
percent respectively. Low or negative growth rate appeared
only after the Asian financial crisis.
China, also an Asian country, is experiencing the
process of economic growth as the aforementioned countries
and regions. Xu Xianchun, based on his own research,
concludes that the Chinese economy can void the prolonged
low growth of Japan after experiencing swift development.
This is not only because China has tremendous potentials and
vast room for development, but also the guarantee provided
by its persistence in reform and opening-up.
Moreover, China has accumulated a great
deal of precious experiences and has strong capacity to
control its economy, which enables it to prevent the drastic
fluctuations of its economy. The chart of the growth of
China's GDP presented by Xu indicates that big ups and downs
had dominated prior to the 1970s, and that the tendency of
steady growth has become increasing strong in recent years.
"Though China still faces many problems, it has
acquired a considerable material foundation and accumulated
rich experiences over the past years. As long as the country
maintains social stability, its economic growth rate won't
decline suddenly," Xu concluded.