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Strong supervision will ensure quality growth

By Amitendu Palit | China Daily | Updated: 2018-03-20 07:30
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After the annual sessions of China's top legislature and political advisory body, the leadership elected at the 19th National Congress of the Communist Party of China will fully assume its new duties and, noticeably, lead China on the way to achieve high-quality economic growth.

The resistance to economic globalization that has built up over the last few years has much to do with the poor quality of economic growth in many parts of the world. Greater emphasis on achieving higher and higher rates of economic growth has become an obsession for several countries, particularly among emerging markets. The obsession has led to over-exploitation of resources. Natural resources such as water and mineral deposits have been ruthlessly exploited leading to serious ecological degradation and damage to the environment. The consequences are visible in China, which, for the last few years has been trying hard to make its economic growth environmentally sustainable.

Greater attention to the rate of economic growth, as opposed to its quality, has also created problems of distribution. In spite of emerging markets such as China growing at high rates, the benefits of the growth have not been equally shared by all. This has widened the income gap among various sections of society.

Inequality has always been a difficult issue for any leadership to tackle since it gives rise to both political and social unrest. Managing inequality therefore becomes a major public policy challenge for leaderships. As a result, along with the rate of growth, countries now also have to pay attention to a balanced pattern of distribution.

Ensuring high-quality growth is not easy. The most difficult part of the challenge is in managing institutions. Industries, businesses, households and innovations must adapt and respond to the target of maintaining the quality of growth. But they might not be able or willing to do so given their habit of pursuing high growth.

It is therefore important to have strong regulations for making them adjust to the challenge of high-quality growth. But it is not enough to have just regulations. The leaderships have to make sure the regulations are implemented by institutions that are vigilant on growth. The most important institutions in this regard include ministries and government departments-both at the federal and local levels-courts and other regulatory agencies.

The task of ensuring regulatory efficiency requires strong political leadership, which will see to it that all those participating in the process of economic growth are rewarded according to their contributions. The leadership must also ensure that economic expansion, whether through greater use of natural resources or technological innovations, should not come at a high cost for the people and society.

And this can happen only if the emphasis on the quality of growth and its distribution are maintained through strong regulations and checks on over-exploitation.

The author is a senior research fellow and research lead (trade and economic policy) at the Institute of South Asian Studies, National University of Singapore.

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