Drivers with great potential

Data indicate that the country's investment in the construction sector, which is closely related to real estate, decreased 39 percent year-on-year in January and February. The country's purchasing managers' index, a gauge of manufacturing trends, also declined to a pessimistic five-month low of 50.1 percent in February before picking up to 50.9 in March. All these mean it will be increasingly difficult for China to maintain the high-paced investment momentum of previous years.

The lukewarm economic outlook highlights the necessity for China to explore new areas of sustainable economic growth as a way to build a well-off society and fulfill the long-cherished dream of rejuvenation.

At his first news conference after he was elected premier in mid-March, Li Keqiang said his government is committed to promoting sustainable growth as a top priority and will seek to convert the dividends to be brought by reforms, domestic demand potential and innovation into the driving forces of national economic transformation.

To enjoy more reform-induced dividends, the country should push for institutional reforms and improvements to effectively reduce transaction costs and boost economic development. According to experts, reforms have contributed 45 percent to 48 percent of China's economic growth over the past decades. Once institutional fetters that hamper national economic development are removed, China's economy will come to a new development stage.

The profound changes in internal and external economic circumstances and lingering external economic uncertainties have made it more urgent than ever for China to advance reforms in some areas. The election of reform-minded leaders at the 18th National Congress of the Party in November means the time is now ripe for China to draft a timetable for systematic and deeper reforms in some key areas.

International practices indicate that a country's household consumption ratio is usually no lower than 61.7 percent once the per capita GDP reaches $1,000. Despite a per capita GDP of $5,532 in 2011, China's household consumption ratio was only 49.1 percent, which means it still has a lot of room for improvement. As the country's pro-consumption policies further unfold and it accelerates urbanization, domestic demand will be further boosted and become a major source of national economic growth.

If the country's innovation capability can be further elevated, this will be another driving force for China's sustainable economic development in the years ahead. According to a recent report issued by the Geneva-headquartered World Intellectual Property Organization, China has become one of the world's leading patent holders although some of them fail to reach the highest level. The ever-increasing number of patents is a reflection of the growing importance China's enterprises have attached to improving the technology of their products, promoting technological innovations and pursuing a domestic-driven growth model.

Zhao Xiao is a professor with the School of Economics and Management, Beijing University of Science and Technology, and Teng Qizun is a member of the university's research section on China's Economy