Drivers with great potential

Domestic consumption, the vitality of innovation and the dividends of further reforms will boost next-stage growth

A recent slowdown in the troika of China's economy export, investment and consumption has highlighted the need for the world's economic powerhouse to find new sources of sustainable growth to facilitate its bid to build a well-off society in an all-round way and realize its long-cherished dream of national rejuvenation.

According to the National Bureau of Statistics, the country's final consumption declined to 51.8 percent of its gross domestic product in 2012, down from 62 percent in the 1980s, and its household consumption declined to 49.1 percent in 2011, from 65.6 percent in 1980. Aside from high investment and deposit ratios and the high government spending that have squeezed household consumption, the country's ever-widening income gap and the weak pro-consumption policies have also contributed a great deal to its consumption insufficiency.

Despite a series of measures adopted to stimulate domestic consumption since 2007, China has yet to boost the role of consumption in national economic growth. In fact, the desire to spend has even declined. All these mean it will be difficult to use consumption to stabilize national economic growth in the years ahead.

Alongside the weak consumption are the gloomy prospects for the country's exports. China has set its foreign trade growth at 8 percent for 2013, a single-digital growth that has been in sharp contrast with a double-digital pace it has witnessed for many years. This is a reflection that the mainland has changed its foreign trade approach from the quantity-focused to quality-focused. The lower target also means China cannot repeat its past model of depending on a foreign trade boom for national economic growth.

Statistics released by China's customs indicate that its trade surplus was $183.21 billion yuan ($29.50 billion) in January, an increase of 7.7 percent from a year earlier and its import and export volume grew 8.1 percent year-on-year. However, this was still a 5.8 percent decline on the volume last December.

The investment environment China faces is also not optimistic. Despite its rapid development over the past decades, the country still cannot completely wean its economic development off investment expansion, although such efforts have been made. Several rounds of huge investment in recent years and the economic fluctuations have prompted the Beijing authorities to turn to a wide range of macroeconomic policies to put a brake on investment enthusiasm, as indicated by the adoption of harshest-ever regulatory measures on the domestic housing market and tightened investment credit policies. Such efforts to restrain investment have had an enormous impact on the real estate sector and manufacturing.