Leading Chinese Economist: Forget GDP; China Must Develop!

China should stop obsessing on GDP growth and not be taken in by international claims that China has now surpassed Japan, to become the world's second-largest economy in GDP terms, well-known economist Liu Fuyuan was quoted saying by Peoples Daily yesterday. Liu Fuyuan is one of a number of prominent economists who have been warning recently that China must continue its long-term national focus on real development issues, not western-dictated notions of finance.

Current GDP growth in China is still largely driven by foreign businessmen, investments and foreign trade, he said, with the share produced by the Chinese people rather low. A lot of profits are being taken away by foreigners, Liu said. "The surplus value always flows from weak countries to strong countries. Overall, China is still a developing country in spite of its large GDP," he said. China must adopt a people-oriented development pattern, raising living standards for the whole nation, Liu said. "We should promote the growth of investments and GDP through stimulating consumption, thereby accelerating industrial restructuring and raising the quality of GDP. In order to fulfill the important role of consumption, China's distribution system must be improved," Liu said. China has one of the most extreme income gaps in the world, a severe and growing economic and social problem.

China should spare no effort to improve the quality of GDP rather than simply obsessing over GDP growth, Liu Fuyuan told the Peoples Daily. The country should stay calm, despite claiming "second place," because a large GDP does not mean a powerful country or wealthy population. China's per capita GDP is still at the level below 100th in the world, at about $3,500 a year.

China was previously obsessed with GDP and took GDP as a core indicator, Liu told People's Daily. The relationship between economic growth and economic development has not been dealt with well, he warned. Liu Fuyuan, former deputy director of the Academy of Macroeconomic Research under the National Development and Reform Commission, has focused his decades of work on long-term development strategy for China, especially the interior regions.