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China's innovation engine

China Daily | Updated: 2013-09-11 08:13

That China's latest economic data sent global markets up speaks volumes about the world's urgent need for a stable source of growth.

China's industrial output, investment and retail sales for August all suggest that the world's second-largest economy is improving, to the considerable and immediate relief of investors at home and abroad, as the global recovery remains vulnerable to slowdowns in some large developing countries and the withdrawal of cheap money in some major developed countries.

However, even more heartening than such short-term promising figures was a key message on Tuesday from Premier Li Keqiang, who emphasized the Chinese government's determination to kindle the fire of innovation through deepened reforms.

At a meeting before this year's Summer Davos Forum, which is themed "Meeting the Innovation Imperative", Premier Li assured a group of domestic and foreign business people that reform remains the driving force for the country's future development. And in an article for The Financial Times in the run-up to the forum, Li wrote "reform is also a way of innovation".

After more than three decades of double-digit growth, it is both natural and necessary for China to embrace a period of moderate economic growth to allow structural readjustment that will ensure sustainable growth.

The sheer size of the Chinese economy, which exceeded $8 trillion last year, has made it increasingly difficult to pursue high-speed growth. Meanwhile, the country's already heavy dependence on investment for growth also demands more efforts to shift the economy toward consumption-led growth.

Yet, in spite of the moderation of the economic growth rate, China's growth potential is still huge. For instance, more than 100 million rural residents are expected to be absorbed into cities over the next decade or so.

To translate this growth potential into reality, both the government and the market will have to do their bit.

By rolling out a slew of market-oriented reforms in the past half year, the authorities have demonstrated their resolution to let the market and society do what they can do well while concentrating on those matters within their province.

Now it is time for Chinese and foreign enterprises to set in motion the wheels of innovation. Undoubtedly the growing Chinese market will reward those who can innovate best to meet the requirements of its 1.3 billion consumers.

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