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Business / Opinion

Economic restructuring essential

By Li Wei (China Daily) Updated: 2014-01-23 15:19

In recent years, economic restructuring has already made progress. In 2012, the secondary sector accounted for 45.3 percent of the GDP, down from its peak of 47.9 percent in 2006. However, further improvements in restructuring should be made, and China should increase the production of value-added high-tech products and decrease imports of equipment manufacturing and high-end raw materials to strengthen the country's own innovation ability.

A market economy should also be fully established. Although China has already established the basic framework of a market economy the relationship between the government and market still needs to be adjusted. The government should not interfere too much in normal market activities, and it should reduce project examinations and approvals, price regulation and market access to prevent wrong policies restraining market efficiency, instead it should focus on areas such as education, healthcare and environmental protection. Its "absence" from these areas is bad for social equity and also for the country's long-term development.

In order to realize economic transformation and upgrading successfully, efforts need to be made to ensure the relationship between sustainable development and GDP growth is correctly understood. More attention needs to be paid to the quality of economic growth, rather than the quantity and speed. Moreover, both the government and the market need to better handle the balancing of short-term policy goals and long-term economic development, especially in the face of the complicated domestic and overseas situation. Macroeconomic policy should address short-term economic fluctuations and stimulate the long-term potential of the economy by promoting innovation and economic upgrading.

China must seize the opportunities presented by the technological revolution and strive to build a modern industrial system that combines green development with informatization. In the real economy, the upgrading of traditional industries needs to be promoted and emerging industries need to be cultivated. Scientific and technical innovation will be the primary motivators of future growth economic transition.

The author is the director of Development Research Center of the State Council. This Chinese version was carried in Economic Daily.

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