A gradual transition toward a market economy is more feasible for present day China. Facts prove that every economy where people can enjoy an affluent lifestyle is manipulated under the market system. There are two criteria to judge the effectiveness of a development mode, first, feasibility, and second, costs of its implementation.

In recent years, China has experimented with new methods of development, instead of simply sticking to gross domestic product (GDP) and other economic indices. Yet many worry that China's speed of development could be slowed by these adjustments?

Not really. A fledgling economy demands adjustments on productivity that prioritizes efficiency, which can help build a solid foundation for social justice. Meanwhile, competitive fairness and environment protection, as well as income balance should be considered for maintaining social stability. Otherwise, it may disturb the social order. Modern economic theory says that social fairness and efficiency can be simultaneously realized in a market economy.

My studies find that the single GDP growth and worshipping of material possessions could reduce people's feelings of happiness. GDP can measure real consumption, but it is useless in assessing intangible costs. Not only China, but almost every economy throughout the world has run into the same problem. I suggest more inputs in health care and environment protection; also people should be given more leisure hours.

China's economic boom is largely export-driven and therefore there are growing calls for a change. But will that impede its strong momentum?

Chinese exports are not excessive. Admittedly, the export-driven growth pattern is not the best choice. In a move to protect fragile domestic enterprises in their early years, the government offered preferential policies to encourage exports. But as Chinese enterprises grow stronger, there is no need for this, as China has recently adjusted its tax rebate policy to steer the new pattern of growth.

To tell the truth, both supply and demand of the Chinese market is thriving. Though the export-oriented era has ended, Chinese products are strong competitively in the global market. China has the world's largest qualified, but cheap, labor force. Moreover, China has excessive household deposits and foreign exchange reserves. As China's capital market opens wider with better services, the efficiency of capital utilization has been highly enhanced. At the same time, speculation on the Chinese currency's revaluation has triggered a foreign capital influx, which, in addition to strong economic growth, propels China's financial market liquidity to new highs. Continuous free inflow of raw materials and natural resources has soothed the bottlenecks facing manufacturing industries.

In the next few years, except for severe natural disasters caused by extreme weather conditions, China's annual GDP growth will be predictably maintained at around 9 percent.

China is the world's fourth largest economy, but consumption takes up less than 40 percent of its total GDP, while that number for other large economies is around 65 percent. The Chinese Government endeavors to increase domestic demand. What are your suggestions for that?

As a matter of fact, the Chinese market is already flourishing. After the Asian financial crisis in 1997, China has heavily invested in projects like expressways for infrastructure construction. Meanwhile, it rallied its efforts to provide a thriving real estate market. However, due to China's insufficient social security resources, private savings is a wise option for individuals.

As incomes increase and the social security network becomes more extensive, the Chinese people are beginning to spend more, resulting in an upgrade of the consumption structure and dwindling Engel's Coefficient. They pay more for education, housing, and automobiles, which directly drives the economic boom. However, investment will continue to account for a high percentage in China's economy, as a result of its 40-percent high personal savings rate and affluent capital supply, as well as a construction boom arising from the country's rapid industrialization and urbanization processes. Despite the ongoing appreciation of the Chinese currency, however, prices of Chinese exports will maintain their competitive edge.

Last year, China's fiscal revenue topped 3.9 trillion yuan ($519.31 billion), while expenditures surpassed 4 trillion yuan ($532.62 billion). Public expenditures on education, medical care and social security for low-income groups are still much lower than that of developed countries. This is expected to change after reforms of the public finance sector.