Wang Baoan, Vice Minister of Finance, wrote an article at Qiushi on challenges the China’s economy faces. He summed up the problems into “four highs” and “four lows:” high input, consumption, pollution and speed; and low output, efficiency, efficacy and tech content.
Wang wrote, “The ‘current version’ of China’s economy is unsustainable.” He cited a few examples to support his conclusion. China’s use of resources is inefficient. The energy consumption of the gross domestic product (GDP) is 2.6 times the world average. The GDP per capita is only 21 percent of the U.S. and 32 percent of Japan. One U.S. dollar increase in GDP needs five U.S. dollars in investment. “This growth relying on and supported by investment is unsustainable.”
Other examples include excess production capacity in steel, flat glass and shipbuilding. The excess capacity in solar photovoltaic modules and wind power equipment hit over 40 percent. Commenting on lack of innovation in China, Wang wrote, “When one fish died in the pond, it is an accident. If the majority of the fish died, it indicates that water is the problem.”
Source: Qiushi, January 1, 2014