By Shannon Tiezzi
Chinese Premier Li Keqiang. Photo courtesy of Friends of Europe via Flickr
China concluded its Central Economic Work Conference on Thursday, putting in place a roadmap for furthering the economic reforms first called for at last year’s Third Plenum. The conference featured remarks from top leaders, including President Xi Jinping and Premier Li Keqiang and reaffirmed China’s commitment to a “new normal” of slower but more sustainable economic growth.
According to Xinhua’s definition, the “new normal” means “a shift from high speed growth to a medium-to-high one, a shift from focusing on quantity and speed to quality and efficiency in growth model, a shift from stressing production expansion to improving current production, and a shift from growth being driven be conventional engines to increasingly driven by new ones.” Most importantly, the “new normal” means an end to the years of double-digit GDP growth driven largely by government investment and exports. That development model has largely run its course and is not sustainable in the long term. Accordingly, China is seeking a new growth model more dependent on domestic consumption and services.
In addition to purely economic concerns, though, the move toward a “new normal” is also being driven by social factors, the conference statement said. Chief among them: “an aging society and decreasing rural work force” as well as “more rigid energy and environmental constraints.” Demographic realities mean China can no longer rely on having a massive, relatively cheap labor force – the current backbone of China’s export-driven economic model. Plus, rising environmental concerns among Chinese citizens are forcing the government to place more emphasis on “green” growth, which too requires an adjustment to China’s current economic underpinnings.
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