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Growth model shift seen as beneficial for Europe, China

By Zhang Chunyan | China Daily | Updated: 2013-09-14 09:00

The Chinese government's economic transformation and structural reform policies aimed at long-term sustainable growth will be mutually beneficial for Europe and China, analysts have said.

Premier Li Keqiang's support of domestic consumption will offer "sustainable and balanced growth for China", said Michal Krol, a research associate at the Brussels-based European Center for International Political Economy.

"It's more inclusive growth because it has supported the rising incomes of the Chinese population. So, it's more sustainable than cherry-picking investment that will generate profit in the future," Krol added.

"With the liberalization of the market and increasing domestic consumption, more European exports will flow to the Chinese market. With the development of Chinese technology, more sophisticated Chinese goods will flow to Europe as well," Krol said.

His comments came after Li's keynote speech at the World Economic Forum's Annual Meeting of the New Champions 2013, known as Summer Davos, in Dalian, Liaoning province.

Li stressed the importance of economic transformation and structural reform, adding that boosting domestic consumption — especially in the service sector — will be the key part of the economic transformation drive, and balancing regional development and narrowing the gap between urban and rural areas will be a major task.

"Urbanization is related to service sectors and management of urban areas. Infrastructure and all kinds of services like education and healthcare must be in place," Krol said.

In terms of the growth dynamics, inland regions are still lagging behind coastal regions, he added.

"On the other hand, inland regions reveal some prospects for economic growth. Since the development of the manufacturing industry tends to slow down in the coastal cities, the inland regions have the potential of taking over the manufacturing industry," Krol said.

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