Old ways cannot produce desired quality of results

'New normal' demands more focus on income, resource distribution

Those are better distribution of educational resources, improving income (especially in the manufacturing and agricultural sectors), reforming the giant State-owned enterprises and establishing flexible pricing for farm products.

Li Yining, a renowned economist and professor at Peking University, said all these issues are exacerbating income gaps.

"The old pattern of 'high speed at high cost' is being gradually abandoned by the government, and an appropriate bargaining system for wages must be established," said Li. Doing so "would stimulate people's work ethic".

The blind pursuit of fast growth has caused a raft of problems－unbalanced wealth distribution, farm product prices that fall even as costs rise, industrial concentration, excessive resource consumption, environmental damage, overcapacity and lack of innovation.

To raise incomes in a sustainable way, China will strive to keep its economic growth and policies steady in 2015 and adapt to the "new normal" of slower speed but higher quality, according to a statement released after the Central Economic Work Conference, which concluded on Thursday.

"A medium-speed economic development model will be more efficient than any previous policy stimulus. The government is paying close attention to achieving a balance between living standards and the quality of development," said Li.

GDP growth was 7.7 percent in 2012 and 2013. In the first three quarters of 2014, it declined to 7.4 percent.

The Goldman Sachs Group Inc recently said that it expected China's growth to moderate to 7 percent in 2015 from 7.3 percent in 2014, reflecting a slowdown in new lending and headwinds from the sluggish housing market.

"In the long run, even 6 percent GDP growth is still quite acceptable and we don't need to worry much," Li said. "Policymakers, therefore, should focus on structural adjustment, high-technology innovation and training."

As the global economy continues to struggle, in particular the European Union, Japan and Africa, the world is relying on China's growth engine more than ever, Li said.

China's reform and industrial upgrading will generate huge market demand, which will boost not only its own domestic demand-driven economic development but also the recovery of the world economy.

Vice-minister of Science and Technology Zhang Laiwu said that high-tech industries are now demanding more from better-educated employees, which poses new challenges.

"High-tech plants prefer younger employees with potential and they provide targeted training," said Zhang. The ministry will support private businesses and small enterprises as they pursue new market growth points from expanding industries such as e-commerce, logistics and clean energy.

To achieve its goals for 2015, the central government vowed this month to accelerate reforms, further open up the economy, encourage innovation, upgrade agriculture and enhance regional integration. It also said it would work to raise the living standards of low-income people.

"Reform will be sped up in administrative approval, investment, pricing, monopolies, franchising, government procurement and outbound investment," said Yan Xiaofeng, secretary-general of the State-owned Assets Supervision and Administration Commission.

"This takes into consideration both the needs for the next year and long-term interests."