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Opinion / From the Press

New normal state for Chinese economy

By Li Yang (chinadaily.com.cn) Updated: 2014-05-15 17:27

The new normal state of the Chinese economy means the government must press ahead with difficult reform and structural transformation, says an article in 21st Century Business Herald. Excerpts:

President Xi Jinping said China’s development is still in a period of important strategic opportunities. He pointed out that China must adapt to its new economic normal state and mind the difference between strategies and tactics.

Xi explained China’s economic situation as a shifting period, a transformation period and a digesting period of previous stimulus packages.

The context of deepening reforms in various areas also defines the characteristics of the new normal state, in which China must seek opportunity from crisis.

Compared with its peak growth period, the Chinese economy is now declining and the country cannot sustain high-speed growth through large-scale investment any longer.

The practical situation leaves China no choice but to look for new driving forces for growth. Deleveraging its economy requires the government to squarely face the difficulties and prepare for uncertainties and potential risks through reform and restructuring.

The government needs to delegate more power to the market and society, to let the market play a decisive role in allocating resources and encourage different parties to provide better public services.

Innovation and consumption should replace investment and exports as the main driving forces for the Chinese economy in the future.

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