GUANGZHOU, China, March 8, 2025 /CNW/ -- News report from GDToday:
"Big economies like China have to grow organically within the country and take a change toward domestic circulation," said David Blair, Vice President and Senior Economist at the Center for China and Globalization (CCG), during China's annual "two sessions" in a recent interview with GDToday. Looking into China's economic trajectory, he emphasizes a strategic shift from rapid growth to sustainable quality.
For this year's "two sessions", Chinese legislators have departed with an ambitious agenda—to prove that a mature economy can prioritize both citizen welfare and global competitiveness. The outcome, as Blair notes, "will shape globalization's next chapter."
China is redefining growth beyond GDP
According to the government work report delivered by Chinese Premier Li Qiang on March 5, in 2024, the country's total economic output reached 134.9 trillion yuan, breaking through the 130 trillion yuan mark for the first time. That marks a growth of 5% compared to the previous year.
Moreover, China set its 2025 GDP growth target at around 5%.
"A 5% growth rate would be extraordinary for mature economies, but China is rewriting the development playbook. But China's real focus now is improving lives, not just chasing numbers," Blair noted, highlighting investments in parks, schools, and rural roads that, while not directly boosting GDP, significantly enhance living standards.
"Twenty years ago, China needed raw GDP growth. Today, it needs quality to bridge urban-rural divides," he added, referencing new infrastructure projects. As records show, China's 27,000 km of new urban greenways built since 2019, though absent from GDP calculations, represent social investments that directly enhance the quality of life for 1.4 billion people.
China's shift to a high-value economy is a transition, not a collapse
Many have painted an impending economic crisis for China; however, Blair thinks that is a false statement. "What I see is structural transition, not collapse." He said China's growth in the past two decades relied on investments in real estate and infrastructure. Now, China is focusing on technology and innovation. "Obviously, there's a lot of investment in education," Blair noted, "which allows for many engineers to be created every year, providing a lot of benefit to technological development."
"It's very important for any country to be careful about what's happening with working-class people," Blair warned. "You have to ensure they have jobs and don't lose out in the transition, but the transition has to happen." Blair emphasized the importance of learning from Silicon Valley's experience in the 1980s and 1990s, where they had a similar model before losing their manufacturing capability or giving it away.
Blair also lauded China's industrial clusters, like the Guangdong-Hong Kong-Macao Bay Area cluster, which combine manufacturing, technology, and finance. "You can't hold back the tide," Blair said. "The transition has to happen," he added.
China's Greater Bay Area charts a path towards sustainable growth
On a road towards sustainable growth, China's Greater Bay Area, combining manufacturing with tech research, is a key regional spot that holds great potential. However, compared to the other three bay areas (the New York Bay Area, the San Francisco Bay Area, and the Tokyo Bay Area), China's Greater Bay Area charts a more effective path that suits itself, according to Blair.
"Silicon Valley had it right in the 1980s with integrated tech and production, but lost its way by offshoring manufacturing," Blair noted, contrasting Apple's "Designed in California, Made in China" model with the GBA's approach. "You can't innovate effectively if you're disconnected from making things."
Silicon Valley, integrated with San Francisco, began as farmland in the 1970s. Regulations and billionaires drove up prices, forcing manufacturing out. Silicon Valley outsourced nearly every component to places like South Korea, Japan or China, lacking a manufacturing base.
Unlike Silicon Valley, the GBA emphasizes common prosperity, which is vital. Its unique development approach holds great potential, as Blair concluded the success story behind China's GBA.
SOURCE GDToday
Yi Liu, [email protected]
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