SINGAPORE: China will be able to maintain a growth rate of 7 per cent over the next few years, according to vice-chairman of the Chinese People’s Political Consultative Conference Tung Chee Hwa. The former chief executive of Hong Kong was speaking at the opening plenary of the Future China Global Forum, which was held at the Shangri-La Hotel on Monday (Jul 20).
Mr Tung also said that domestic consumption and the service sector could just be the new driving forces of the Chinese economy, going ahead. He said consumption for the first half of this year would likely reach 60 per cent of the economy, while the service sector already accounts for 49.6 per cent of the gross domestic product (GDP) today.
The Chinese economy has continued to grow, despite a 6.9 per cent decline in the nation’s international trade in the first six months of the year, said Mr Tung. On the other hand, the disposable income of the Chinese has grown by 7.6 percent, after adjusting for inflation, he added.
“Indeed for a number of years, disposable income has been growing at the same level as the GDP, or close,” he said.
Mr Tung also noted: “The Chinese economy has great elasticity and potential that gives her a lot of leeway. (Due to) this (and) the enormous experience and competence in the leadership and the trust of people of China, I strongly believe the Chinese economy will continue to grow.”
Others who spoke at the session included Indonesia’s former trade minister Mari Pangestu and former World Bank chief economist Justin Lin.
Mr Lin said he was confident that investments into China and the nation’s consumption rate will help maintain the 7 per cent growth rate in one of the world’s largest economies.
“Export we certainly do not have high hopes because the economies in high-income countries have not fully recovered yet,” Mr Lin said at the opening plenary. But the professor at Peking University said good investment opportunities are “still abundant” in China, and so are resources for investment there too.
With investment comes jobs and an increase in consumption rate, Mr Lin added. “If you put these two factors together, I think the foundation to maintain 7 per cent growth is still solid,” he said.
About 450 businessmen, officials and academics are expected to attend the two-day forum, which discusses issues on China’s developments.
Speaking to the media, CEO of the Sino-Singapore Guangzhou Knowledge City Chin Phei Chen also offered a word of advice. He said companies looking to venture into China should ride on government-backed platforms to share knowledge and tap on networks of other companies.
“Gone are the days when we look at China as the base for cheap labour, manufacturing and so on. China is becoming the market, the market which creates a lot of potential. China itself, you can say it is a jungle. For many companies, they are either unfamiliar with China, or not sure exactly how to go about doing it,” he said.
Mr Chin added: “China indeed is a very big country, (with) many challenges and structural problems. But the ability and determination of the central government to overcome the challenges would set them very differently from other countries.”
The forum is into its sixth run this year. In his keynote address, Mr Tung also paid tribute to Singapore’s founding Prime Minister Lee Kuan Yew.
“We shall long remember him, not only for his achievements for Singapore, but as a Chinese, for his many efforts to promote the relationship between the two countries, so that people of the two countries and people of the world can benefit,” Mr Tung said.
On Monday, Mr Tung also called on Prime Minister Lee Hsien Loong and Emeritus Senior Minister Goh Chok Tong at the Istana. The Foreign Affairs Ministry said in a press statement that PM Lee and ESM Goh had “fruitful exchanges” with Mr Tung on recent regional and global developments.