T-Bond Investment Benefits Country and People

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Last updated at: (Beijing Time) Wednesday, February 20, 2002

T-Bond Investment Benefits Country and People

The following is the full text of People's Daily Commentator's article published on the front page of the newspaper on February 20.

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The following is the full text of People's Daily Commentator's article published on the front page of the newspaper on February 20.

Issuing additional long-term treasury bonds (T-bonds) to increase investment in infrastructure construction is a major economic policy decision of the CPC Central Committee and the State Council, which has been in force for four years. Over the past four years and more, various regions and departments have been making concerted efforts and working hard, through organizing T-bond investment, they have not only established a large batch of major infrastructure projects, but have also effectively expanded effective domestic demands and promoted economic development.

T-bond investment's contribution to boosting the growth of the national economy cannot be obliterated. In the face of the grave challenge posed by the Asian financial crisis in previous years, the Party Central Committee and the State Council worked out a series of important measures to expand domestic demand and implement a proactive fiscal policy and a steady monetary policy, make use of T-bond funds to strengthen infrastructure construction, thus enabling us to successfully resist the impact of the Asian financial crisis and maintain a sustained, rapid and healthy development of the national economy. Under the circumstance of a general world economic recession in the just past year 2001, China's brilliant economic performance has left a deep impression on the whole world. During the period from 1998 to the end of 2001, China had issued a total of 510 billion yuan worth of T-bonds for long-term construction. According to estimates released by relevant departments, T-bond project investment directly pushed economic growth by 1.5 percentage points in 1998, 2 percentage points in 1999, 1.7 percentage points in 2000 and 1.8 percentage points in 2001.

T-bond investment over the past few years has enabled the country to concentrate resources on setting up a large batch of major infrastructure projects, and completing some big things which were left unfulfilled though they had been wanted to be completed for many years. For instance, in the aspect of river and lake dyke projects, in environmental protection and ecological construction, in communications, transportation and the central granary construction, and in the technical renovation of enterprises and the upgrading of industries, T-bond investment has helped start up and promote many highly influential projects. T-bond investment has also spurred the west-bound development to take a substantive step forward and has thus not only quickened the construction of major projects including pipelining natural gas from the west to the east, the west-to-east electric power transmission, the Qinghai-Tibet Railway and Qinghai potash fertilizer and started up west ecological and environmental construction projects such as returning farmland to forest and grassland.

T-bond investment has played an important role in improving people's living standards. Over the past four years, T-bond investment has directly or indirectly increased numerous work posts. Sustained economic growth as well as employment increase has resulted in the steady growth in incomes for urban and rural residents, the completion of large groups of infrastructure facilities and their being put into use has brought about remarkable improvement in people's living conditions.

Four-year practice proves that T-bond investment has benefited the country and the people, it has both stimulated domestic demands for investment and consumption within a short period of time and laid a sound foundation for long-term development of the national economy and created conditions for long-term growth of productive forces. Implementation of a proactive fiscal policy and issuance of long-term construction T-bonds are a development method persistently used by the Party Central Committee and the State Council for solving problems arising in the course of advance and development. It is a successful practice whereby the Party Central Committee and the State Council promptly adjust the macro-control policy in light of the change in international and domestic situation. This strategic decision fully demonstrates the superb leadership art of the third generation leading collective of the Party with Comrade Jiang Zemin at the core in controlling the overall situation, coping with various kinds of complicated situation and leading the people of the whole country in blazing new trails.

The Central Economic Work Conference held late last year again pointed out that expanding domestic demand was a strategic principle which we must persist in for a long time, this year we will continue to carry out a proactive fiscal policy and a steady monetary policy, continue to issue long-term construction T-bonds, maintain necessary investment force in bringing about a sustained, rapid and sound development of the national economy. Since China is a large, populous developing country, economic development must be based on domestic demands. There is still a fairly big gap between China's infrastructure construction and the need of economic development and people's livelihood. While making active use of foreign markets and resources, we must persist in expanding domestic needs, and this will enable China's economy to have greater room of maneuver to cope with various kinds of challenges.

The four-year practice has enabled us to have accumulated many good experiences and blazed a trail for government-funded project management. We should resolutely implement the plan of the Party Central Committee and the State Council for this year's economic work, constantly sum up experiences, improve the method for the management of T-bond-funded construction projects, make proper use of T-bond funds and guarantee the quality of projects, so as to give greater play to the role of T-bond investment.

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