"China to Maintain 5% Growth for Several Years... Must Face Reality"

Openness Needed for Innovation Transition
Maintain Transparency and Communicate More

Professor Jin Kewi of the Department of Economics at the London School of Economics (LSE) in the UK mentioned that China is unlikely to return to the high economic growth rates of the past and advised to "face reality."

At the Summer World Economic Forum (WEF) Annual Meeting (Summer Davos Forum) held in Tianjin, China on the 28th, Professor Jin said, "This year, China will reach about 5% GDP growth, and this level may continue for several years." He explained, "Geopolitical factors and external conditions are increasing China's innovation costs," and added, "China must also face reality."

Before the spread of COVID-19, China had maintained high growth rates above 6% for several years. However, this year, it set a somewhat conservative growth target of around 5%, and in the first quarter, the first quarter after transitioning to with-COVID policy, the figure was only 4.5%, raising concerns about an economic recession.

Professor Jin emphasized, "China is now at a practical transition stage from industry-led to innovation-driven economic development, but innovation-based growth is not that fast," and stressed, "China still needs more reforms." He also added, "Investing in innovation and technology is good, but it does not provide enough jobs for China, which still relies on the service industry."

He argued that the innovation transition of the Chinese economy necessarily requires opening up to the outside world. He said, "At this stage, to increase trust in foreign companies' investment in China, China must maintain high transparency and communicate more with international capital markets." Furthermore, he added, "More reforms and openness are the only ways to overcome some of China's economic bottlenecks."

Regarding the recent decline in the value of the yuan, he interpreted it as a "normal change" that "can somewhat promote China's export trade." Concerning the sluggish domestic demand in China, he mentioned, "Household incomes need to be increased, and the profitability of private enterprises must be improved."

The Summer Davos Forum is an event held annually since 2007, alternating between Dalian in Liaoning Province and Tianjin, as China seeks to lead discussions on the world economy and global issues. It was suspended due to the COVID-19 pandemic after the 13th meeting held in Dalian in 2019 and resumed this year after four years.

This content was produced with the assistance of AI translation services.