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Leadership to adjust growth model
(chinadaily.com.cn)
Updated: 2005-10-10 09:56

It should instead move towards the model adopted by developed countries -- depending more on technological innovations and less on resources and labor for growth, it said.

Over the years, government coffers and state-run banks have funded many viable infrastructure projects, but also unworthy ones such as city plazas and high-tech parks that remain empty.

Corruption and lack of accountability played a big part in the wasteful spending as local officials are able to pocket kickbacks from developers and others, and face little reprimand for pushing through unnecessary projects.

Such "blind" investment has led to a waste in resources such as steel and energy, causing prices to shoot up and raising fears of a depletion of resources.

This has also led to large-scale environmental degradation, with many of China's rivers and lakes polluted and many Chinese cities blanketed with filthy air.

The model of growth adopted, which has placed the emphasis on China's coastal regions, has also created a serious income gap between urban and rural areas, with a majority of the rural population falling far behind in living standards as compared to city dwellers.

Unless farmers' incomes rise, it is feared China will not be able to continue growing at the current rapid pace of more than 9 percent a year.

The next five years is a "golden development period" but also fraught with challenges, Xinhua said.

Zheng Xinli, deputy director of the Central Policy Research Office, attributed China's growth to the huge investment and excessive consumption of natural resources.

Growth must be achieved through scientific progress and improvement in laborers' quality, Zheng said.

From 1979 to 2004, China's economy grew by a blistering 9.4 per cent annual average, making it the sixth largest economy in the world. However, China's consumption of natural resources is alarming: its gross domestic product accounts for 4 per cent of the world, while its consumption of water accounts for 15 per cent of the world, steel for 28 per cent and cement for 50 per cent.


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