China to Maintain Near-seven Percent Growth to 2010

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Last updated at: (Beijing Time) Tuesday, April 09, 2002

China to Maintain Near-seven Percent Growth to 2010 - Experts

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China to keep a 7-8 percent economic growth

The central government's think-tank predicted that China will keep a 7-8 per cent annual economic growth rate between 2002 and 2005. From 2006 to 2010, the growth momentum will slow down, dangling between 6.4 and 7.8 per cent, according to the Development Research Centre under the State Council.

But the centre believes that the country still has more room to expand its economic development.

"China will keep robust development, and before 2005, the potential annual growth rate will not drop below 8 per cent growth rate," the centre recently concluded at a conference on China's macroeconomic trends.

China to activate investment from private sectors

Zhang Jun, president of the Market Economy Research Institute under the centre addressed the conference and stated that China should further deepen its restructuring of State-owned enterprises and should activate investment from private sectors, which are supposed to be the main economic power houses of the State.

It is estimated that the share of the private sector in China's gross domestic product (GDP) has reached 33 per cent, a little lower than the 37 per cent of the State-owned economy. The other 30 per cent comes from agriculture, the collectively owned economy and the foreign-funded sectors.

The development of the Chinese private economy started in the early 1980s, and it grew at an annual speed of 20 per cent, much faster than the average growth rate of the national economy's 9.5 per cent over the past two decades.

"Private enterprises have achieved great success because they are market-orientated and have flexible operational mechanisms," said Zhang.

China to continue implementing effective policies

Meanwhile, China should also continue with its proactive fiscal and monetary policy as its main tool of macroeconomic management, Zhang said.

Since 1998, the central government has implemented a series of active and effective policies to avoid the possible negative impacts from the 1997 Asian financial crisis.

The central government decided on Sunday to issue 150 billion yuan (US$18 billion) of treasury bonds for infrastructure construction in 2002. Vice-minister of the State Development Planning Commission Jiang Weixin said more long-term treasury bonds will be issued this year.

Jiang said the government's decision was based on the facts that people's savings deposits have increased considerably, banks have sufficient funds, interest rates are low and the ratio of national debt to GDP is still within safe limits.

But for 2002, another expert from the Chinese Academy of Social Sciences (CASS) said China is facing a tough external environment, which is not expected to improve in the short term with the world economy locked in the doldrums.

"With such a gloomy global economic picture, it is hard to expand exports by a big margin," Zhang Shuguang, a CASS senior researcher said.

China's major trade partners, such as the United States, Japan and the European Union, have suffered from slow growth, or even worse, recession.

"Economic growth will thus rely more heavily on domestic demand," Zhang said.

Source: China :Daily

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