Remarks by Angel Gurría, OECD Secretary-General, delivered at the China Development Forum Economic Summit
Beijing, March 17th, 2012
(As prepared for delivery)
Vice-Minister Yang Weimin, Ladies and Gentlemen,
It is a great privilege to join you to open the Economic Summit Session of the Development Forum.
Today’s discussions take place in a highly uncertain global context. The recovery in most OECD countries remains fragile. Yet, against this challenging backdrop, the fundamentals of the Chinese economy are strong. This is good news for both China and the rest of the world.
Let me just start by sketching out China’s current pattern of growth.
China’s ongoing transformation has been impressive.
The country’s growth performance and the sustained improvement in the Chinese population’s living standards are impressive. Important steps have also been made more recently to rebalance economic growth towards domestic sources. Indeed, the sizeable reduction in China’s current account surplus, from 10.2% of GDP in 2007 to 2.8% of GDP in 2011, has made growth less dependent on external demand. This rebalancing is essential to make growth more durable.
It is equally encouraging to see that household consumption is playing a more important role, diversifying the sustainable drivers for growth, all along with investment. Inflationary pressures have also subsided, with the pace of activity beginning to moderate.
While China’s recent growth trajectory certainly has been notable, like many other emerging economies, the country still faces a number of challenges to build a more inclusive economy as it attains higher levels of prosperity for its citizens.
Going forward, the commitment to wide ranging reforms will be critical.
Sustaining China’s transition towards more balanced, harmonious and sustainable growth will require targeted efforts in several key policy areas. Let me just say a few words about some of the reforms we could explore in greater detail in our discussions today.
First of all, enhancing the productivity and competitiveness of the Chinese economy are important priorities. Efforts to further reduce the role of the government in the economy could be important, particularly by opening up sectors still dominated by state-controlled companies.
China could also turn its impressive economic drive into a source of opportunities for all if it ensures that a greater share of the profits generated by state-controlled companies is paid as dividends to the government and used to finance social benefits instead of being reinvested automatically by the state-owned companies themselves.
Let’s not forget human capital. To become a high-income and more socially inclusive country, China also needs to make further advances in education, in turning learning opportunities into skills. Shanghai’s outstanding performance in the OECD Programme for International Student Assessment, PISA, highlights China’s potential for building a high-quality education system.
And indeed, ensuring access to a quality education for all should be a top policy concern. This is entirely consistent with the lessons of the OECD Skills Strategy, which we are currently developing to help countries design and implement sound and effective policies to convert educational attainment into the skills and competencies individuals need to excel in the workplace.
China should also continue its strategic efforts to become an economy built on knowledge and innovation. The research and development (R&D) capacity of this country has been increasing at an amazing rate in the past years. According to your national statistics, China's spending on R&D surged nearly 22 percent last year to 1.8% of GDP, making China the 2nd country in the world by total R&D spending.
But as highlighted in the OECD Innovation Strategy, government policies need to be comprehensive and stretch well beyond R&D. Importantly, China’s efforts to promote R&D in state-controlled companies need to be mirrored with initiatives to promote innovative activities within other sectors and civil society. This could help the country reap the full potential of innovation for growth and jobs.
And last but certainly not least, promoting a more balanced and harmonious economy is also about promoting greener growth. We welcome the 12th five-year plan which sets ambitious targets to reduce pollution and the energy intensity of the Chinese economy.
To ensure that green growth creates opportunities in new industries and services, China must deploy a range of policy tools and approaches. The OECD Green Growth Strategy offers guidance on the policy levers, measurement and monitoring approaches that could support such efforts. It shows that “green” and “growth” can go hand in hand as countries use their resources to achieve and maintain strong and inclusive growth.
Growth also needs to become more inclusive. This can be achieved by addressing rising inequality and creating opportunities for laggard regions to benefit from strong growth and catch up with their more dynamic counterparts;
Ladies and Gentlemen,
China has become a central pillar for the world economy. It is so reassuring and encouraging to see that it is meeting its economic challenges with discipline, flexibility and pragmatism, in constant search for social improvement. And it is highly stimulating for the OECD to be part of this process through an increasingly important collaboration.
There is so much to learn from each other! As my friend Martin Jacques told me some months ago at a seminar at the OECD, the road to China’s modernisation is not necessarily to emulate the experiences and models of other countries but this does not mean that we cannot share expertise and experiences and advance in close association.
I thank you for this opportunity and, without further ado, pass the floor to our next two OECD speakers:
Richard Herd, the head of the China Desk of the OECD Economics department, will tell you about the lessons from his work on the preparations of the third Economic Survey of China which will be published next year.
And Stefano Scarpetta, the deputy director for Employment, Labour and Social Affairs at the OECD, will focus on inequality and the policies that could be deployed to halt rising inequality in the OECD area and beyond.
I thank you for your attention and look forward to a fruitful discussion.