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Leading economist: China should improve GDP quality

08-30-2010 15:44 BJT

China's GDP for the second quarter of 2010 overtook that of Japan as the second largest in the world, attracting worldwide attention and provoking considerable discussion. However, many scholars consider it worth noting that although the Chinese economy remains big, it is not strong.

China should spare no effort to improve the quality of GDP rather than simply obsessing over GDP growth, said Liu Fuyuan, former deputy director of the Academy of Macroeconomic Research under the National Development and Reform Commission.

Liu said that China should remain calm despite claiming "second place" in terms GDP because a large GDP does not mean a powerful country or wealthy nationals. Due to its huge population, China's per capita GDP, which still ranks below 100th in the world, stands at around 3,500 U.S. dollars, even less than half of the world average.

Liu said that China's GDP growth is largely driven by foreign businessmen, foreign investments and foreign trade. The share of the value produced by the Chinese people in GDP is rather low, with considerable profits taken away by foreigners.

"The surplus value always flows from weak countries to strong countries. Overall, China is still a developing country in spite of its large GDP," he said.

Liu believes that China was previously obsessed with GDP and took GDP as a core indicator, and the relationship between economic growth and economic development has not been dealt with well.

"We should prevent a few people from grasping at the interests of GDP growth that belong to the entire country," he stressed.

The quality of GDP will be enhanced if the Chinese economy truly adopts a people-oriented development pattern, Liu said.

"We should promote the growth of investments and GDP through stimulating consumption thereby accelerating industrial restructuring and raising the quality of GDP. In order to fulfill the important role of consumption, China's distribution system must be improved," Liu said.

Editor:Xiong Qu |Source: People's Daily

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