(Yicai Global) June 6 -- China has the potential to maintain a growth rate of around 6.5 percent over the next 10 years if it continues to deepen reforms, according to former World Bank Chief Economist Justin Lin (Lin Yifu).
In 40 years of reform, China has changed from a backward, introverted economy to a middle- and upper middle-income country, state-run China News Service cited Lin, also an advisor to China’s cabinet, as saying at a recent conference for Chinese companies. The speech echoed his words at the Boao Forum for Asia on April 9.
China’s economy has improved because the country blazes its own trail, he said. Lin believes that the country should further deepen reforms and allow the market play a decisive role in resource allocation.
Economic growth is based on rising levels of labor productivity, Lin continued. Improving this depends on industrial technological innovation, and new industries with higher added value are still emerging. Through supply-side reform and by upgrading innovative industries, China can use its favorable domestic conditions to maintain its current levels of expansion.
China’s major industries are still labor-intensive ones with low added value, an area the United States has avoided since the 1950s, he added, saying mutually beneficial trade with the US is still possible but each country has its own areas of specialization.
Editor: James Boynton