UNITED NATIONS, Mar. 5 -- To itself or to the world at large, China has made a decision to adjust its economic structure and transform its development mode in "a very timely manner," a UN expert has said.
The comments of Hong Pingfan, chief of the global economic monitoring center of the UN Department of Economic and Social Affairs (DESA), came in an interview with Xinhua earlier this week.
"Chinese leaders attach great importance to the transformation of economic development mode and structure, and some concrete guidelines and policies have already been put forward, which are in essence very timely," Hong said.
The decision came about at a time when the massive counter-crisis stimulus measures launched by the Chinese government, which were designed to lift domestic demand, have also caused some structural side effects. As a result, investment continues to grow extensively, far exceeding the growth of consumption, which clearly manifests a "slight deterioration of the macroeconomic structure," he explained.
"Of course, this is by no means an issue that has only come up in the last one or two years, but a long-standing problem," Hong said.
For a long time, China's development mode can be characterized by the growth of GDP driven by both investment and export. "In the early stages of China's development, there is nothing wrong with this growth mode," he said.
Rather, it has proved to be successful in the sense that it has helped sustain an average GDP growth of 10 percent in the past 30 years of reform and opening up, and lifted hundreds of millions of people out of poverty.
Such a mode was in line with the preliminary development phase at that time and was underpinned by China's distinctive advantage over other economies -- an enormous but relatively cheap labor force, he said.
Over the years, such a labor force has supported the rapid development of China's export-oriented processing and manufacturing industries, and the bottleneck caused by poor infrastructure and limited industrial capacity can only be effectively solved by increasing investment every year.
A nation's growth mode and economic structure, however, are more dynamic than static, and are subject to change so as to keep in line with its changing position in the world economy and national development phase, he said.
"Now is the right time for such a change," Hong said. "Otherwise, it would be impossible for the Chinese economy to move up to a new level."
"Let's say, the extensive mode in economic growth over the past 30 years has transformed a populous China into an economic big power, then a turn to an intensive development mode will help China emerge as an economic powerhouse in the next 30 years," he added.
Such a transformation for a country with a population of 1.3 billion will prove to be conducive to the world as well, as it struggles to deal with the daunting challenges of climate change, he said. "If China can successfully change its growth mode, then not only itself, but the entire world will benefit from it."
By changing its energy resource structure and realizing a mode transformation from high emissions, high growth to low emissions, high growth development, China could establish itself as a model for many other developing countries, he said.