An objective understanding of China’s development (II) (2)

First, China will further promote the cause of Reform and Opening up. 2012 is the 20th anniversary of the speeches by Deng Xiaoping, the chief designer of China’s Reform and Opening up. Not long ago, General Secretary Xi Jinping had an inspection tour in Guangdong and Shenzhen, sending a strong signal that China will continue to push forward the process of the Reform and Opening up, which is also good news for international investors.

Second, China will further accelerate the release of domestic demand. In 2011, China’s final consumption expenditure was about 22 trillion yuan, equivalent to one-thirds of that of the United States, so it still has huge upside potential. Since China’s per capita GDP reached 5,400 U.S. dollars in 2011, the consumption structure and industrial structure had entered a new period of rapid escalation. The 18th CPC National Congress set the ambitious goal of doubling residents’ per capita income of 2010 by 2020, so Chinese market will release a purchasing power reaching 64 trillion yuan. The McKinsey & Company of the United States estimates that consumption will be the largest driving force of China’s GDP growth by 2020.

Third, China will accelerate the pace of industrialization and urbanization. China currently is in the middle and late period of industrialization, with the level of urbanization only reaching about 51 percent, so it needs at least 20 years or more to reach 70 percent, the level of high-income countries. By then, over 300 million people will transfer from villages to cities. It is predicted that the urbanization will contribute 2 percent to 2.5 percent to GDP growth and create unprecedented consumption potential and market expansion.