For many years, reform has been a key word in China-related talks at Davos forums. Since the Third Plenary Session of the 18th Central Committee of the CPC held in 2013, China's new measures to deepen its reforms have attracted worldwide attention.
Observers at the forum say every major step China takes to implement reforms will have an impact on the world.
Economic growth in China geared down from a double-digit figure to 7.5 percent in the second quarter of 2013. As the pace decelerates, drastic changes have also taken place in the width and depth of economic reforms.
At the 2014 Davos Forum, special sessions have been scheduled to focus on China's economic shifts and restructuring, which shows the significant impact China's economic shifts have on the rest of the world.
The World Economic Forum is a window through which one can view the changes in the relationship between the Chinese economy and the world. As China has maintained a relatively high economic growth, its gaming and cooperation with the U.S. and Europe have moved onto a new level.
Heated discussion is expected to focus on the new characteristics of the competition and cooperation between China and the world's major economies in Davos.
International experience has shown that the "middle-income trap", where a country that attains a certain income will get stuck at that level, is an economic situation China has to face in its path of development.
For most developing economies, raising the per capita income from 3,000 U.S. dollars to 10,000 dollars is an extremely difficult hurdle to cross.
OVERCOMING CHALLENGES
1. “The middle-income trap” is an economic situation China has to face in its path of development.
2. It is an extremely hard hurdle for most developing economies to raise their per capita income from 3,000 U.S. dollars to 10,000 dollars.
3. Will China be among the ten percent of middle-income countries growing into high-income ones?
4. There have been persistent predictions and suspicion that China will fall into the “middle-income trap.”
5. A majority of experts are optimistic about China’s ability to avoid the trap.
6. China’s investment-dependent growth model should be transformed into one driven by indigenous innovation.
International experience has shown that the "middle-income trap", where a country that attains a certain income will get stuck at that level, is an economic situation China has to face in its path of development.
For most developing economies, raising the per capita income from 3,000 U.S. dollars to 10,000 dollars is an extremely difficult hurdle to cross.
The concept "middle-income trap", put forward in the East Asian Economic Development Report by the World Bank in 2006, denotes the fact that very few middle-income economies have managed to grow into high-income economies. Of the 101 middle-income economies listed by the World Bank in 1960, only 13 joined the rank of high-income economies by 2008.
Will the success rate of only about ten percent favor China, the largest developing country in the world? As a matter of fact, ever since China's per capita GDP surpassed 3,000 dollars, there have been persistent predictions and suspicion that China will fall into the "middle income trap."
At the 2012 Summer Davos meeting in Tianjing, the "middle-income trap" already was a hot topic linked to China. Still, a majority of experts were optimistic about China's economic prospects, believing that China is capable of avoiding the trap, but the key to achieving that is for China to transform its long-time investment-dependent growth model into one driven by indigenous innovation.
INNOVATION-DRIVEN GROWTH
1. China’s future growth should be based on higher quality and efficiency, and driven by innovation.
2. China cannot find a single solution to the problems and challenges it is facing now.
3. “We have to 'Silicon Valley-nize' the world.” (Klaus Schwab)
4. It is important to have agility and to be always at the forefront of technological progress.
5. China's new efforts for institutional innovation will cement the foundation for long-term economic development.
6. Technological innovation should focus on key industrial and technological progress that reshapes consumption, business and growth models.
Chinese Premier Li Keqiang said the future economic growth of China should be based on higher quality and efficiency, and driven by scientific and technological innovation and technological progress.
For his part, Schwab believes China should allow technological innovation to play a greater role so as to maintain its international competitiveness in the long run.
"The key for success in the future will be the strength of innovation... it is really important to have necessary agility and to be, if possible, always at the forefront of technological progress," Schwab once said.
"I have to say we have to 'Silicon Valley-nize' the world. If the U.S. economy is restored today despite all its problems, it is mainly because those innovative companies," he said.
Like in other parts of the world, China cannot find a single solution to the problems and challenges it is facing now. With the diversification of China's growth model, innovation will play an increasingly important role in China's economic transition, Schwab believed.
China is showing its courage, insight and resolve for innovation in such moves as streamlining administration and delegating power, establishing the Shanghai Free Trade Zone, and proactively slowing down its growth and planning finance and tax reforms.
It is noticed that China's latest efforts for institutional innovation are guided by marketization and aimed at improving the efficiency of resource allocation, which will cement the foundation for China's long-term economic development.
Technological innovation, Schwab said, should focus on key industrial and technological progress that reshapes consumption, business and growth models, while relevant institutional innovations are necessary for creating a fair business environment, improving trading transparency, strengthening accountability system and guaranteeing equal chances for market participants.
Continued high economic growth has brought great changes to literally all elements in the life of the Chinese people.
More and more Chinese are now dressed in quality, tasteful and characteristic clothes, and eat in a safe, healthy and elegant way.
China is learning from the Western-born "Farm to Table" concept to improve food security, and has witnessed rapid changes in the housing market that affect the life quality of the people and the stability of the national economy.
