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Chinese economy makes strides in right direction: experts

Update Date:2015-12-21 17:31:39 Source:BeiJing Tannet Views:533
BEIJING - Overseas experts say that the Chinese economy is making major strides in the right direction, as the country is undergoing an upgrade of its development pattern from an investment- and export-driven model to one driven by innovation and consumption.

Great changes

Over the past few decades, particularly since the adoption of the policy of reform and opening up in 1978, great changes have taken place in economic development in China, and the people's livelihood has significantly improved as a result, in sharp contrast to what used to be in the past.

For centuries, China continued to disappoint foreign businessmen, "not least because many ordinary people have been too poor to buy anything." But great changes have taken place in the Chinese economy over recent years, which is being driven by new engines such as e-commerce, said a report published on The Economist in September.

Official data showed that the scale of China's e-commerce financial market reached 6 billion yuan ($937 million) in 2013 and online trade exceeded 15 billion yuan ($2.34 billion) in 2014. With a growth rate estimated to reach 94 percent in the next three years, the whole e-commerce market is expected to exceed 100 billion yuan ($15.62 billion) in 2017.

New sectors of the Chinese economy have seen such rapid growth thanks to the optimization and upgrade of its structure.

In the eyes of Stephen Roach, senior fellow of Yale University's Jackson Institute of Global Affairs, China has two models of economy: the old one driven by fixed investment and exports, and the new one boosted by private consumption.

The old model, which fueled China's economy growth in the past three decades, is decelerating, while the new model is still in its incipient stage, he said at a seminar held in China Institute of Global Affairs in November.

Services activity grew 8.4 percent year on year in the first half of 2015, far outstripping the 6.1-percent growth in manufacturing and construction, according to an article written by Roach recently.

In 2014, the service sector contributed 48.2 percent to China's Gross Domestic Product (GDP), exceeding the combined 42.6 percent share of manufacturing and construction, according to the article.

The shift toward a services-based new model lifted the downside pressures in the manufacturing-based old model, he said.

Roach predicated that the service sector could account for 65 percent to 70 percent of China's economy in next 20 years.

"The key understanding of China is not the number of GDP, but the mix of economy," said Roach.

The article transsshipment from China Daily

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