China: Structural reforms help boost real GDP growth rates
Source: World Trade Organization Date: 2008-05-27
Structural reforms in China, including trade liberalization, have resulted in annual real GDP growth rates in excess of 10% over the past 4 years, rising per-capita income and poverty reduction. In the process, China has become the world’s third largest trader.
Since its previous Review in 2006, China’s trade regime has continued on a liberalizing trend. Ongoing reform will help to sustain high growth in the face of a number of challenges including various economic imbalances, according to a WTO Secretariat report on the trade policies and practices of China.
The report highlights details about structural reforms, including in the financial and other sectors that have introduced more market-oriented measures aimed at achieving a more efficient allocation of resources. The report also notes that China has continued to be one of the largest recipients of inward FDI and has become a large provider of outward FDI, reflecting its increasing integration into the global economy.
However, the report identifies imbalances in the sources of growth in the economy, which is mainly driven by exports and investment rather than by consumption, a widening gap between savings and investment reflected in China’s growing current account surplus, and rising income inequality despite high GDP growth.
The WTO Secretariat report, along with a policy statement by the Government of China, will be the basis for the second TPR of China by the Trade Policy Review Body of the WTO on 21 and 23 May 2008.
