China needs pro-growth policies, reforms in 2013: think tank

Thu Dec 20, 2012 8:54am EST
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By Kevin Yao

BEIJING (Reuters) - China's economic performance in 2013 needs pro-growth policies and speedier reforms to boost domestic demand in the face of uncertainty in the global environment, a senior economist at the cabinet's think tank said on Thursday.

"We need to focus more on boosting domestic demand," Hou Yongzhi, head of the development of strategy and regional economy of the Development Research Centre (DRC), the State Council's policy think tank, told a news conference.

"How fast growth is will depend on the external environment. We will achieve an appropriate growth rate, which will not be too low," he said, when asked if China could achieve 8 percent growth in 2013.

China is on course to achieve growth of 7.7 percent in 2012, according to forecasts in the benchmark Reuters poll, the slowest full year of expansion since 1999.

While that is way above the world's other major economies, it is far below the roughly 10 percent annual growth seen for most of the last 30 years.

Weakness in the external environment remains a key drag on an economy in which exports generated 31 percent of gross domestic product in 2011, according to World Bank data, and where an estimated 200 million jobs are supported by foreign investment, or in factories producing for overseas markets.

Hou said China's economic potential was bolstered by companies moving up the productivity value chain and the process of urbanization that remained a key driver of growth.

China's urbanization rate may have reached 51.3 percent in 2011, but that remains 10-20 percentage points lower than in developed countries, he said.   Continued...

Vehicles drive on the 3rd Ring Road through Beijing's central business district, December 17, 2012. REUTERS/Jason Lee