China rethinks its growth model

Despite subdued growth forecasts, hopes remain high for the Far East trade in 2015. While forecasters are predicting the slowest growth for China since 1990 in the coming year, and Japan is still dealing with the fall-out from the financial crisis, it’s not all doom and gloom. According to a source at The Beijing Axis, China along with South Korea is the main growth driver in the region. “China’s GDP growth rate is slowly levelling out, but the country is growing fast enough to become the world’s largest economy and hence the world’s foremost economic powerhouse in the next 20 years,” the spokesman told FTW. “Furthermore, trends such as technology, innovation and IT are increasingly driving this economic growth, which bodes well for future prospects in the region.” In recent years Beijing has recognised that China’s investment-led, exportdriven growth model has run its course and that economic reforms are required if China is to sustain its growth rate over the coming years. “Economic reforms in 2014 have therefore been at the forefront of China’s new administration, led by Xi Jinping and Li Keqiang,” he said. “Some of the major developments that can be seen in the Far East are the further opening up of China for global business, economy/state-owned enterprises becoming far more market-driven, and continued financial deregulation (interest rate liberalisation, capital account liberalisation and RMB internationalisation).” At a corporate level, he added, Chinese enterprises, especially state-owned businesses, are focusing on robust corporate governance and becoming more prudent in decision making, especially for the international markets. “This has led them to be more strategy oriented than operations oriented." INSERT Beijing has recognised that China’s investmentled, export-driven growth model has run its course. CAPTION A street market in Shanghai ... China is fast becoming the world's largest economy.