China must quicken reforms to sustain growth: Statistics chief

Monday, 19 March 2012 00:00 - - {{hitsCtrl.values.hits}}

BEIJING: China faces increased constraints from sources of labour and raw materials and must accelerate structural reforms to sustain growth as it seeks to reduce reliance on investment and exports, the country’s top statistician said on Saturday.

The world’s second-largest economy also faces environmental issues, Ma Jiantang, head of the National Bureau of Statistics, told an economic forum. The economic slowdown, he said, was caused by slackening external demand and “deep-rooted” domestic problems.

“The advantages that have supported China’s fast economic growth in the past 30 years are weakening and constraints are rising,” Ma said.

“Constraints on China’s economic growth are increasing, there is only one way out -- we need to further strengthen our efforts to change the economic model and adjust structures to help sustain relatively fast growth.”

China’s demographic dividend that has partly driven the economy’s 10 percent annual average growth over three decades is diminishing as the surplus labour pool declines, he said.

The proportion of the labour force relative to the total population fell for the first time in 2011, Ma said.

Premier Wen Jiabao cut China’s 2012 growth target to an eight-year low of 7.5 percent and made boosting consumer demand the top priority.

Annual economic growth is widely expected to slow to just over 8 percent in the first quarter from 8.9 percent in the previous quarter -- the fifth consecutive quarter of slowdown.

Ma said weakening economic activity in the first two months “was within the normal range” and he remained confident on the economic outlook for 2012.

Liu He, vice head of the Central Leading Group for Financial and Economic affairs, told the forum that he believed China’s economy would steadily move towards more modest expansion.

But the economy would be more balanced and sustainable as consumption plays a bigger role in driving growth, he said.