Robust Chinese Economy Can Survive Long-term Tests

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Last updated at: (Beijing Time) Wednesday, November 21, 2001

Robust Chinese Economy Can Survive Long-term Tests

The health of the Chinese economy can withstand the trials of time, a finance official said Wednesday in Tianjin.

The health of the Chinese economy can withstand the trials of time, a finance official said Wednesday in Tianjin.

As the September 11 terror attack in the United States worsenedthe slackening global economy and reduced to almost nothing the progress Asian countries made after the 1997 financial turmoil, the Chinese economy has maintained steady growth, Liu Mingkang, president of the Bank of China, said at the Ninth China-Japan Economic Symposium held in Tianjin, north China.

Statistics from the National Bureau of Statistics show China's gross domestic product (GDP) went up by an encouraging 7.6 percentfrom January to September, higher than the 7 percent growth targetfor the year.

According to Liu, five factors contributed to the stability of the Chinese economy.

First, values of renminbi (RMB) and foreign exchange in China have been stable in recent years. With price fluctuations deducted,the Chinese RMB appreciated 30 percent in October this year over the same month of 1994.

Being a safe harbor financially, China finds its deposits in foreign exchanges surging toward 200 billion US dollars and expects more input of overseas capital.

With some 40 percent of RMB deposited in banks, Liu said, the country could provide a loan of 8 trillion yuan (about 963.86 billion US dollars) and spend 150 billion US dollars to support domestic construction projects.

China's GDP would continue to maintain a 7-percent growth in 2001 and 2002, said Liu, as the country's money supply is growing steadily between 13 and 14 percent.

Second, China was well prepared for the Asian financial crisis by paying close attention to financial stability and rectifying economic order.

Facts have proved that China's strategy of boosting the national economy through exploration of domestic demands rather than pure export-orientation is especially effective, Liu said.

Third, with China opening wider to the outside and trying to follow international practices, substantial changes have taken place in the country's economic rules and regulations.

Fourth, China is keen on transforming the function of the government and improving economic management efficiency.

Finally, the speedy development in science and technology and better education quality from institutes of higher learning have combined to increase domestic laborers' competitive edges in recent years.

7 Percent Growth Obtainable for 2001 and 2002