Beijing Business Today published an interview of Professor Huang Guoxiong of China People’s University on the Chinese economy. In Huang’s opinion, “The high growth rate with low efficiency is the biggest problem currently facing the Chinese economy. The development of the services industry is the key to expanding domestic demand.”
Huang stated that, “at present, the key issue of China’s economy is not the growth rate of seven percent or eight percent. The biggest problem is a high growth rate and low efficiency, with the output having value, but revenue missing.” Production, according to indices such as GDP growth, employment, and capacity, can no longer meet the current development, and will exacerbate overcapacity. Small to mid-sized businesses can adjust by producing according to orders received. Large, particularly State-run or centrally run, enterprises are still producing according to indices on capacity, GDP growth, and employment.
Source: Beijing Business Today reprinted by Xinhua, March 31, 2014