The editor of one of China’s leading finance publications says that the future of its economy depends upon Beijing’s willingness to push through with much-needed structural reforms.
Speaking in Hong Kong at the 2018 China Economic and Finance Outlook Forum on 24 October Hu Shuli, the editor-in-chief of Caixin Media, said that the most critical issue for China’s economic future would be structural reform, given the unsustainable nature of the existing growth model.
Hu pointed out that the heavy emphasis upon GDP growth that has characterised Chinese economic policy for the past several decades has not been without its drawbacks, such as surging debt levels and structural imbalances.
“Although China’s high-speed growth over the past 40 years has made it the world’s second largest economy, as well as lifted 700 million people out of poverty…the side effects of focusing exclusively on GDP growth are extremely obvious,” said Hu.
“The old high-speed economic growth model is unsustainable. The incessant accumulation of debt exacerbates market concerns about financial risk…and the constant growth in pressure resulting from natural resource consumption is also something we can’t overlook.”
According to Hu the implementation of structural reform in accordance with market principles would serve as a fundamental means of resolving the challenges currently faced by the Chinese economy, by shifting towards a new growth model and shoring up the quality of growth.
Hu said that the strongest growth driver for the Chinese economy in 2018 and beyond would be private enterprise, which in her opinion is “the outcome of the reform and opening period, as well as the best guardian of its fruits.”
“As China’s growth eases, this new economic segment will not only play a role in supporting the economy, it will also drive the economy towards more innovative growth models, as well as gradually establish the systems needed for development.”