China's economic data for the first half of the year fell flat on many people's expectations. Many are suspicious about China's growth potential. China barely matched up to a medium-sized developed country. Its domestic demand is far from saturation. It has great market potential.

One possible solution to this problem could be to reform the consumption model through upgrading industry. However, energy and water shortages are hindering China's further development. These problems can only be solved by building infrastructure. What China need most is investment.

As a developing country, China has a long way to go. However, we do have industries with excess capacity. Therefore, based on asset-liability management, backed by financial support and credit from the government, we can mobilize idle personal savings to establish a new investment model, under which we can invest in infrastructure. This will help to accumulate the fundamental resources and solve the problem of excess capacity.

We shouldn't focus overly on GDP growth. My concept of "supernormal growth" means a development strategy that does not conform to the normal rules of a Western market economy. The core of the strategy is called "dual impulses": namely the technical innovation and resource allocation, and a national strategic investment fund based on China's institutional advantage. This investment will provide the economy with a supernormal purchasing power of 2 percent. This is not out of the natural evolution of the market economy.

Infrastructure development, which is closely related to the people's livelihood and China's long-term stability, has created the supernormal purchasing power for China's development over the next three decades. In order to maintain such a process, the Chinese government needs to work hard to maintain social, political and economic stability, and optimize the role of government in a market economy.

Therefore, what we need is not a copy of a Western-style market economy, but a market economy with Chinese characteristics. We should streamline administration, optimize government functions and root out corruption. As long as we implement necessary reforms, the Chinese economy will still be able to grow rapidly over the next two to three decades.

China is now at a crossroads. Do we need to adopt universal values? Some Chinese scholars have tried to use Western knowledge to promote China's modernization. However, the more we know about the U.S., the less confidence we have in taking on its principles.. It would be a tragedy for one country to directly copy another.

Although the West has modernized society and created a new era for humanity, its systems have structural defects. China must innovate the Western dominated structure of knowledge and find its own way to enter the world.

Shi Zhengfu is director of the Center for New Political Economy, Fudan University and author of the book "Supernormal growth: China's economy between 1979 and 2049"

This article was translated by Li Huiru. Its original unabridged version was published in Chinese.

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.

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