Chapter 16: Towards a New Growth Strategy
16. Towards a new growth strategy Much has been written about China’s reforms and its open door policy but very little on its new development strategy. Ishikawa (1983) suggests that in the reform period: ‘the previous development policy of high growth and high investment is being replaced by a new one which aims at securing a steady increase in personal consumption and in which investment is weighted in favour of light industry and agriculture’. However, this view proved premature, for while the development of heavy industry is no longer emphasized and improvement in consumption is stressed it is not true that the government has abandoned its high growth and investment strategy. Otherwise it would be difficult to explain why the government continues to extol the doubling of China’s gross national product (GNP) every ten years as a goal of long-term development (Chai and Roy 2006). Similarly, the allegation that China no longer pursues a high investment policy does not square with the fact that China’s fixed investment as a percentage of gross domestic product (GDP) has risen from 23 per cent in 1978 to 40 per cent in 2007 (Brandt and Zhu 2010). What, then, is China’s new development strategy? To begin with, the high-growth goal in order to catch up with developed countries’ income per capita has not changed. This is evidenced by the targets set in the 1980–2010 long-term Development Plan which adopted a three-step strategy to achieve the goal, with each first step envisioning to double...
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