Op-Ed Contributors

Seizing opportunities key

By Zheng Qing-Yuan (China Daily)
Updated: 2010-10-26 07:59

Accelerating the transformation of the mode of economic development is a crucial choice for more sustainable growth

Profound changes are taking place in our country's economy and society.

China's development is ushering in new opportunities and breeding new hopes as it adapts to the significant changes in the structure of global demand, takes a firm hold of the significant strategic opportunities, and accelerates the transformation of its mode of economic development.

The Fifth Plenary Session of the 17th National Congress of the Communist Party of China stressed that, speeding up the transformation of the mode of economic development is the only way to promote scientific development in line with China's basic national conditions and the characteristics of the development stage.

This is not only a sober judgment of the current situation at present but also a crucial choice for our future.

After 30 years of rapid development, China's modernization drive has taken two successful steps in its "three-step" strategy. We are "halfway through the game" in fulfilling the goal of building an all-round xiaokang (moderately well-off) society in the first 20 years of the century.

However, the country's modernization drive is at a critical stage. We cannot afford to either wait or slow down. The need to speed up the transformation of the mode of economic development has never been so forbidding or so imperative.

Despite the great achievements in reform and development, problems of imbalance, bad coordination and non-sustainability remain prominent. The resource and environmental constraints on economic growth are intensifying, investment and consumption are imbalanced and income gaps are conspicuous. Also the country's capability for innovation is not yet strong, the industrial structure is not rational and the agricultural foundation remains weak. Social conflicts have significantly increased as the coordination between urban and rural development is poor and there is an overall shortage of jobs.

Transforming the mode of economic development is an indispensable step if we are to achieve speed and quality, quality and quantity, and a unity between the material and the social, and between man and nature.

The international financial crisis has highlighted shortcomings in China's mode of economic development, as the external environment has become more complicated. In the "post-crisis era", the competition for markets, resources, talent, technology, and standards has become more intense, and such global issues as climate change, the scarcity of energy and resources and food security have become more prominent. Now various forms of protectionism are materializing.

Accelerating the transformation of the mode of economic development is an indispensable step if we are to take advantage of the new division of work in the world and create a new competitive edge by participating in international economic cooperation and competition.

At present, China's per capita GDP is nearly $4,000. Judging from international experience, this phase has favorable conditions for continuous development, but it is also a critical transitional stage.

Around the world, quite a few countries have successfully launched the process of modernization, but few have continuously pressed ahead with the modernization process and ultimately succeeded. After they began the modernization process, many countries enjoyed good momentum in the initial stage, only for the process to stagnate or even reverse later; the key reason being their failure to adjust the mode of development in a timely manner.

For our part, to successfully meet the challenges and to maintain the momentum of the modernization process, we must have a good command of the overall situation, seize the available opportunities, and turn the transformation of the development mode from a spontaneous response of the market into a conscious move of reform.

The evolution from "transforming the mode of economic growth" to "transforming the mode of economic development", and then to "accelerating transformation of the mode of economic development," reflects our Party's keen insight into the stages of development in China's modernization drive. It is also a strategic choice to push forward China's modernization.

Accelerating the transformation of the mode of economic development concerns the overall situation of reform, opening-up and the socialist modernization. The idea of adhering to the strategic adjustment of the economic structure as the "main direction of attack" adheres to scientific and technological progress and innovation as an important means of achieving the country's goals. It adheres to guaranteeing and improving people's livelihoods as the fundamental starting point and ultimate goal. It adheres to building a resource-saving and environmentally-friendly society, and it adheres to reform and opening-up as a powerful driving force. One that pointed out not, only the direction, but also, the key points for accelerating the transformation of the mode of development. It embodies the inherent requirements of the Scientific Outlook on Development, and reflects understanding of the law in developing socialism with Chinese characteristics.

Talking about the shift in the mode of economic development in the agricultural sectors, Karl Max once said that plots of land that had never been cultivated and were relatively less fertile would produce long-term yields without fertilizer or short-term yields through extensive cultivation. He said that, because of historical inertia and immediate gains, people will choose the intensive mode of agricultural production.

From this perspective, we can easily understand the complexity and difficulty of accelerating the transformation of the mode of economic development. Transforming the mode of economic development will be a slow and protracted process if the systems and mechanisms featuring one-sided pursuit of fast growth do not change, if the framework for the evaluation and appraisal of officials' performance that focus overwhelmingly on GDP figures remain the same, and if the pricing regime remains incapable of faithfully reflecting resource scarcity and environmental costs. A one-sided emphasis on speed, international markets and wealth accumulation and the subsequent neglect of efficiency, means that domestic demand and an improvement in peoples' livelihoods will be difficult to achieve. This could explain why speeding up the transformation of the mode of economic development will be one of the main threads running through the 12th Five-Year Plan, and perhaps the only way to achieve scientific development.

Accelerating the transformation of the mode of economic development must be driven by unswerving deep reforms. Only by continuously pressing ahead with economic, political, cultural, and social reforms, and striving to make new breakthroughs in key areas can systems and mechanisms that are dynamic, efficient, more open and conducive to scientific development be established. It is essential that institutional arrangements that are conducive to the accelerated transformation of the mode of economic development be formulated.

Substantial progress can be made in transforming the mode of economic development by deepening reforms, and bringing into play the market's fundamental role as an "invisible hand", the government's pivotal function as the "visible hand" - as well as the guiding role of performance assessment as the "direction-giving hand."

The driving force behind each round of profound economic and social changes has been advanced by productivity. To accelerate transformation of the mode of economic development, the most fundamental approach is to rely on the power of science and technology. Our most crucial tasks are to significantly improve and enhance our capability for independent innovation, as well as improve our capability for knowledge and technology transfer and large-scale production.

By upgrading our industries through independent innovation, seeking transformation in development, and pursuing development in transformation, we will surely be able to achieve fresh core competitive edges under the new conditions of international competition.

However, each round of profound economic and social changes should take people's interests as the fundamental criteria. For socialist China, the purpose of economic and social development has never been mere accumulation of wealth but continuously improving people's livelihoods and enhancing people's well-being.

Accelerating the transformation of the mode of economic development must conform to people's expectations, and make guaranteeing and improving people's livelihoods as the starting point and ultimate goal.

We must perfect institutional arrangements that guarantee and improve people's livelihoods, promote the equalization of basic public services and adjust income distribution. We must unswervingly take the road of common prosperity, so as to let people share the fruits of development and achieve fairness and justice in society.

Our country's development is still in a promising period of significant strategic opportunities. From the perspective of either our own experience, or the history of development in the rest of the world, whether a country can seize opportunities and promote development determines whether that country can obtain a competitive edge and secure a bright future.

By continuously enhancing our awareness, initiative and creativity in accelerating the transformation of the mode of economic development, and improving the comprehensiveness, coordination and sustainability of development, we will certainly be able to achieve sound and rapid economic and social progress. Opportunities are fleeting. The transformation brooks no delay.

The article first appeared on People's Daily on Oct 25.

(China Daily 10/26/2010 page8)