China is in urgent need of a new round of transition: Economist

Wang Yiming, deputy director of the development research center of the State Council. [Photo/IC]

BEIJING - China's economic problems can only be solved through a new round of transition, according to an economist Monday.

The world was surprised by China's double digit GDP growth since the opening-up in 1970s, but that economic path no longer fits the current situation in China, Wang Yiming, deputy director of the development research center of the State Council, said in an article published in the People's Daily on Monday.

Wang said China's economy had been through significant changes after the global financial crisis in 2008, and the current "new normal" era needs a new round of economic transition.

The decreasing GDP growth was a clear sign of new normal, revealing not only the decline in demand but also the structural changes in demand in China, said Wang.

Hence, the old economic pattern of China would not turn around the economic downturn and could even increase the risk of a financial breakout, Wang stated.

This new round of economic transition that Wang believes in should heavily feature China's supply-side structural reform, therefore, meeting the changes in demand-side.

Wang suggested three pressing steps to be carried out - reduce unnecessary and low-end productivity; increase high-end productivity; and further structural reform in government, state-owned enterprises and the financial system.

The leadership has been leaning more toward supply-side structural reform since November 2015.

The article also echoed China's national strategy of innovation, saying that the essence of the new transition was a shift from "made in China" to "innovated in China." The author regarded the world's ongoing revolutionary development in digital technology and China's economic transition as a golden opportunity to promote innovation.

Efficiency, another popular term mentioned by officials around the country, was the core of this new round of transition, Wang mentioned. He agreed that China's economic focus needed to shift from quantity to quality.