Hello, welcome to visit Shanghai Forum
Don’t regard the international environment as a disaster. The UnitedStates has basically restored; the Europe has huge economy and with theaddition of its advantages of technology and systems, it would maintain greatresilience to recover. I’ve always disapproved the statement that China’seconomy outshines rivals.
Reporter: Gong Yingqi
Reporter: People have cared about the growth rate of GDP deeply since thebeginning of this year. Premier Wen Jiabao set the target of economy growthrate as 7.5% for this year in the two sessions, which is the first time ineight straight years that this number went “below 8”. It’s 8.1% in the pastquarter. How do you estimateChina’seconomic growth this year?
LongYongtu: Economic transition inChinastill needs a long time; thedevelopmental growth in east area has slowed down, whereas it rises rapidly inthe central and western regions. Though the overall figure is not remarkable,that inSichuan,ChongqingandGuizhouis 14% to 15% as we can see. In all central and western areas, the trend ofinvestment driven growth is still strong. As for this year’s growth rate, Ithink 8% is not a problem.
Reporter: Does the eastern part meet the bottleneck and need to find newsources of growth?
LongYongtu: The eastern part would indeed suffer quitea painful adjustment process. However, during the period of industrial upgrade,labor intensive manufacturing industries, including processing trade, shouldnot be dropped too soon. The growth and cultivation of new industries take timeand high-end service industry could not be matured at once. As a result, weshould not give up the market we’ve already held.
Development space forChina’s labor intensive industriesis 10 to 20 more years, which accords with our history and current situation ofpopulation structure. Western countries, including US andUK, developed their industries forone to two hundreds years. The transition should be to improve commercialquality and meet market demands. Labors in central and western regions stillhold competitiveness as everyone considers that labors begin to turn expensive.
Reporter: Someone believes that the European debt crisis is getting worse andworse. What kind of role do you think shouldChinaplay in this crisis?
LongYongtu: Don’t regard the international environment as a disaster. TheUnited Stateshas basically restored; theEuropehas huge economy and with the addition of itsadvantages of technology and systems, it would maintain great resilience torecover. I’ve always disapproved the statement thatChina’s economy outshines rivals.China’s foreign trade data for the last threemonths is not good, but it’s fine generally since the global financial crisis;a 20% increase happened inChinalast year. I think it’s possible this year that the figure would go up bydouble digits – 10% to 15%. So don’t easily give up the international marketwe’ve already held; I’ve consistently pointed this out.
Reporter: People have paid much attention to prices of commodities, foodsafety and air pollution. Do you think whether these livelihood issues wouldaffectChina’sdevelopment?
LongYongtu: Inflationary pressure inChinais not big actually; it is reflectedin the rise of agricultural products and food prices, which belongs tostructural inflation. We can see that the price of industrial products is nothigh while the prices people feel high are exactly those supposed to rise. Thisis logical becauseChinais on its way to industrial society from agricultural society. The price ofagricultural products is supposed to increase and people need to understand andaccept. In this process, the dilemma of medium and low income crowd woulddefinitely follow. Therefore, some necessary financial policies should beapplied, such as subsidy for medium and low income crowd - a strategic subsidyis inevitable.
LongYongtu’s brief profile:
Long Yongtu is a member of InternationalAdvisory Board of Boao Forum forAsia. He usedto be the vice minister atChina’sMOFTEC, the chief negotiator whenChinajoined the WTO and secretary-general of Boao Forum forAsia.
