China economy at turning point, says World Bank

2012-02-27 11:24

Beijing – China has reached a “turning point” in its economic development, with the pace of growth likely to nearly halve in the next two decades, World Bank and Chinese government researchers said today.

The Asian giant must overhaul its economy to avoid a sudden slowdown in growth, such as scaling back its vast and powerful state-owned enterprises and breaking up monopolies in strategic sectors, the analysts said in a report.

After averaging 10% annual growth for the past 30 years, China’s export and investment-driven economic model was no longer sustainable, World Bank President Robert Zoellick said at the launch of the “China: 2030” study.

“The case for reform is compelling because China has now reached a turning point in its development path,” Zoellick told a conference in Beijing.

“The country’s current growth model is unsustainable. This is not the time just for muddling through – it’s time to get ahead of events and to adapt to major changes in the world and national economies.”

The report was backed by Vice President Xi Jinping and Vice Premier Li Keqiang, who are expected to succeed President Hu Jintao and Premier Wen Jiabao during a major transition of power that begins at the end of this year.

But the report, prepared by the World Bank and the Development Research Centre under the State Council, China’s cabinet, is likely to face resistance from people with “vested interests” in the current model, Zoellick said.

“Reforms are not easy – they often generate pushback,” he said.

Liu Shijin, Vice Minister of the Development Research Centre, said the reforms were necessary as the world’s second largest economy slows to five to six percent annual growth in the next 20 years from the current nine percent.

Chinese leaders frequently talk about the need to reform the country’s economic model, partly by reducing its heavy reliance on exports and increasing domestic consumption.

But significant reforms have been slow as stability-obsessed leaders try to maintain rapid economic growth seen as essential to create enough jobs for the country’s 1.3 billion people and keep a lid on unrest.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.