Why China needs to develop a modernized economy

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General Secretary of the CPC Central Committee Xi Jinping said Wednesday that China will build a modernized economic system that focuses on the growth of the real economy, emphasizing the quality of growth. It's the first time that China has explicitly proposed fostering a modernized economy.

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A modernized economy refers to better quality and higher efficiency achieved with supply-side structural reform, turning China into a manufacturer with advanced technology, and that inspires entrepreneurship and innovation.

China is the world's second largest economy with an annual output of about 75 trillion yuan (around 11.3 trillion US dollars). The country has contributed more than 30 percent on average to the global economic growth in the past four years.

China's economy has maintained robust growth – its GDP rate expanded 6.9 percent year-on-year in the first three quarters of 2017 to 59.3 trillion yuan, according to fresh data from the National Bureau of Statistics (NBS) Thursday.

Experts say that achieving this goal is crucial at this current stage of development.

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Firstly, socialism with Chinese characteristics has entered a new era, as stated in Xi’s report. And the primary disparity facing Chinese society today is between unbalanced and inadequate development and the people's ever-growing needs for higher standards of life.

The change of principal contradiction would change the theme of economic development, Liu Yuanchun, vice president of Renmin University of China, said. So the country needs to adapt to the new period, where economic adjustment is a must.

“Without a modernized economic system corresponding with the demands of the time, the ultimate goal of a new era cannot achieve,” said Wei Jianguo, vice chairman of China Center for International Economic Exchanges.

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Second, China's economy is transforming from a phase of rapid growth to one of better quality and higher efficiency. And cracking the "big but not strong" problem in the economy is a pressing matter.

“China’s current economic system still faces certain deep and structural problems. So building a modernized economic system would help solve those problems,” Liu added.

Li Gang, vice president of the Chinese Academy of International Trade and Economic Cooperation, expects the development trend of China's economy would be to combine the government's supervision with the market's freedom.

Others added that a modernized mind set, new technology and modernized management would help build the economic system.

“The first is a modern mind set, which is the reason why we are hearing so much talking about what we have in this new development theory. The second is new technology, and finally, modern management, which is how you combine the ingredients together to make society better off,” Zhu Ning, deputy director of the National Institute of Financial Research at Tsinghua University, told CGTN.

And to achieve better quality and higher efficiency, Zhu underscored the importance of environmental protection and paring down overcapacity. Both areas may hurt short-term economic growth, but “are very important in terms of improving quality and ensuring sustainability,” Zhu said.