An unfinished vessel lies abandoned at a shipyard in Ningbo, Zhejiang province, as a gloomy global shipping market takes its toll on China's ship-building industry, forcing many companies to go bankrupt. But many economists believe the country's potential for growth in domestic consumption can be "tremendous" even though its economic growth has seen a continuous slowdown. [Photo/China Daily]
Although innovation will be important to boost China's next stage of development, the country still holds "considerable opportunities" that can be tapped just by implementing existing wisdom, said John Quelch, dean of the China Europe International Business School.
The country's room for growth in domestic consumption can be "tremendous" even though its economic growth has seen a continuous slowdown in the last couple of years, raising concerns for its growth prospects.
Quelch, who has done extensive research on China since he moved from Harvard to the Shanghai-based school in 2009, told China Daily that this should not be a time to lose heart, and that better efforts should be made to do the right things for the economy.
His comments came ahead of the upcoming 18th National Congress of the Communist Party of China, which will be held on Nov 8.
Quelch's argument is divided into two parts.
First, that China's level of consumption, in its contribution to total GDP, may not be as lackluster as shown by the official data.
And second, that domestic consumption can be stimulated in various ways, most of them not new, such as building a more extensive social safety net and making income distribution more even.
For the first part of his argument, Quelch noted that official data showed that 37 percent of China's GDP was made up of consumption, a figure much lower than in many emerging economies, let alone countries in the Organization for Economic Cooperation and Development, or OECD.
The figures give the impression that China - despite near double-digit growth in the last couple of decades - still hasn't changed from an investment-driven economy into a consumption-driven one.
But this impression, Quelch noted, is challenged by several economists who argue that a 40 to 45 percent share of consumption "may be closer to the reality" because of certain omissions in the official statistics, particularly related to the value of housing and rents.
