China’s Macroeconomic Situation in 2013 with Predictions and Policy Recommendations for the Next Fi.doc.doc

China’s Macroeconomic Situation in 2013 with Predictions and Policy Recommendations for the Next Fi 　　Abstract: China’s economy is currently on a modest recovery path, but its foundation still remains fragile. According to our projections, the rate of GDP growth in 2013 might be over 8% and higher than the rate of last year. In the next 5-10 years, the accelerating growth trends seem to reach an end, and China’s growth tends to step into a new phase characterized by a structural growth deceleration. We predict that the potential growth rate might fall into a range of 7%-8% per year. Moreover, according to the estimates on the non-agricultural employment elasticity and labor force supply, in 2013-2017, a 7% annual growth is sufficient to achieve the full employment of urban and rural people. It implies that instead of the rapid growth rate, China’s macroeconomic objectives for the next 5-10 years should focus more on the development quality, which refers to the improvement in microeconomic efficiency, increasing competiveness and stimulating technological innovations. Accordingly, the policy concerns should shift from demand-side management to supply-side management. 　　Keywords: structural growth deceleration, supply management, stable growth of higher efficiency 　　JEL Classification: E60 　　After the 18th CPC National Congress, the public showed optimism for China’s economic growth and reform in 2013 and the next few years, mainly because the future development patterns are expected to take a new approach. In particular, the growth rates might drop from near 10% over the past 30 years to around 8%. The macro policies in response to the potential declining growth rates are facing several challenges, which include short-term policies to ensure macro stability and mid-long term plans of development and reform. This paper aims to offer sound insight into China’s macroeconomic situation in 2013 and the next five years and make relevant policy recommendations. 　　1. Ch