A New Phase in Economic Growth

Deng Xiaoping said “We should allow some people to get rich fi rst， and the rest will follow.”Now it’s time for the rest to follow， as the Chinese government has put it on the top agenda in the next fi ve years. T e most signifi cant part of China’s 12th Five-Year Plan is the focus shift from the export-led sectors to increasing domestic consumer demand by raising Chinese labors’ incomes to allow all Chinese residents prosper in this new era.This is a significant change for China， and it also means bigger challenges. Income increase obviously will lead to labor cost increase， which is possible to impact export-led sectors as well as encourage high infl ation. So an important task for China is to balance the inflation threats with increasing domestic demand while maintaining export-led sectors.T e changes currently going on in the rural China are tremendous and under- reported， especially in the Western media， whose focus is always on the large cities like Beijing and Shanghai. Actually the changes in rural China are going to be the engine of China’s economic growth in the next fi ve or ten years， and of course China will face tremendous challenges. I think China is well- equipped to tackle them.For example， large universities and research centers can be moved out of those big cities， so that not everything is concentrated in these areas. As a result， the migrant population will not always fl ow to big cities.T e global economy recession continues and the global fi ght for social welfare increases， the role of the government in narrowing the income gap becomes more crucial. Therefore China should speed up forming a public service system and a public service-oriented government， which would lay the foundation for boosting domestic demand and sustainable development.China should promote more technology innovation and more value-added products. A more frequent intellectual exchange between Chinese students and researchers are much more needed for making the value-added products going global.— Prof. Kay Shimizu， Weatherhead East Asian Institute of Columbia University， USAA Unique OpportunityBy stepping up efforts to restructure the economy to boost domestic demand， adopt a green growth model， and make growth more inclusive， the current economic model will evolve into a “triple bottom-line”， achieving results through better economic performance， while protecting the environment and promoting social equality.T e 12th fi ve-year plan presents a unique opportunity to address lingering structural economic constraints and to allocate resources optimally， ensuring that the rich and poor people and regions of China achieve balanced economic development.In 10 to 15 years， China will be ranked as an upper middle-income country if its economy continues to grow at the current pace. Policies promoting the quality of growth are essential. T e result will be a pattern of inclusive， balanced， and sustainable economic development.— C. Lawrence Greenwood Jr.， Vice President， Asian Development Bank