by Xinhua Writers Jiang Xufeng, Fu Xingyu, Wang Jun

    DALIAN, Sept. 12 (Xinhua) -- John Zhao, chief executive officer of Hony Capital, told Xinhua here Saturday that unlike the deleveraging issue facing the developed economies hit by the economic slowdown, the major challenge for China currently is to improve its industrial structure.

    Zhao made the remarks during an exclusive interview at the Summer Davos held in north China's coastal city Dalian, where governmental officials, business leaders and experts from around the world discussed how to relaunch growth in the global economy.

    GROWTH RATE AND BALANCED DEVELOPMENT

    His view was echoed by Yao Jingyuan, chief economist of China's National Bureau of Statistics, who said "it was not difficult for Chinese economy to expand at a relatively quick pace, but it was hard for China to improve its industrial structure."

    Although China's economy has managed to grow relatively fast this year, it still faces the challenge of making it develop in a more balanced, coordinated and sustainable way, said Stephen Roach, Morgan Stanley's Asian Chairman.

    Official figures showed that investment contributed 6.2 percentage points of China's 7.1 percent year-on-year gross domestic product (GDP) growth in the first half this year due to the government's 4-trillion yuan (586 billion U.S. dollars) stimulus package to bolster the economy, and consumption did 3.8 percentage points.

    Exports, which slid for eight straight months, dragged down the growth by 2.9 percentage points.

    LONG-TERM TASK

    Li Yang, vice president of the Chinese Academy of Social Sciences, said although China's massive government stimulus package had played an important role in boosting the economy, it would take time and efforts for China to improve its industrial structure.

    The sustainable growth of the world's third largest economy needs a boost not only from domestic demand but also from exports, said Li Wei, a Shanghai-based economist with Standard Chartered Bank, adding that "industrial upgrading would be a long-term task for China in the following five to ten years".

    Industrial upgrading is not equal to injecting money into the economy, but also requires a sound market mechanism and reforms, added Li Yang.

    Experts held that the global economic slowdown also provides companies with a precious opportunity to rethink about their growth pattern in the past and to look for new sectors to relaunch the growth in the post-crisis period.

    Liu Xiaoguang, president and chief executive officer of Beijing-based Capital Group, said that the green economy would trigger a new round of industrial revolution globally, and it would become the new global economic growth locomotive in following years.

    "Companies within traditional industries should endeavor to make full use of the current timing and beef up efforts on technological innovation in this area," Liu added.

Special Report: Summer Davos in Asia (2009)