By Wang Yiming, DRC

2017-10-31 17:45

The report of the 19th CPC National Congress points out that China's economy has shifted from a high-speed growth phase to a high-quality development one. This is a very important judgment. On the one hand, it shows that we are no longer blindly pursuing speed as we used to, and on the other hand, it indicates that we have made positive progress in transforming the mode of economic development, which will enable China to embark on a high-quality development path.

Viewing from the perspective of demand structure, the current investment growth has slowed down significantly. If the investment price factors are deducted, the actual investment growth is lower than GDP growth. It shows that China's dependence on investment has declined by a big margin, and consumption has become a more important driving force. This major change plays a fundamental role in ensuring China to shift to a high-quality development mode.

In view of residents' consumption structure, along with the swift upgrading of residents' consumption, the people would pursue higher quality products. Such upgrading will force the economy to turn to a high quality level. It's also a strong force to change the development mode of the economy.

China's innovation has entered an active period, providing support for a high quality development. At present, China’s “unicorn” enterprises (tech startups valued at more than $1 billion each) occupy a large proportion in the world, with a lot of new consumption patterns and industrial models rising rapidly, and the economic expansion has created more favorable conditions to improve the quality and service of product.

As regards enterprises, with the advance of supply-side structural reform, enterprises gradually adapt to the decline of economic growth, and they have, through increased efforts to control costs, promoted mergers and acquisitions to improve the quality of products and services as well as enhance profitability. It lays the foundation for China to turn to high quality development stage with micro-level vitality. In addition, to further expand the opening up and encourage Chinese enterprises to expand their overseas presence, we should compete with world-class enterprises in the international market, which will also enhance quality improvement of products and services. It is an important driving force propelling China's high quality development to a new high. Note: Wang Yiming, Vice President, member of the Leading Party Members’ Group and Director-General of Department of Macroeconomic Research, DRC