China's economy to grow 8.5 percent this year

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Last updated at: (Beijing Time) Tuesday, December 02, 2003

China's economy to grow 8.5 percent this year

China's economy is expected to grow 8.5 percent this year, said Ma Kai, minister in charge of the State Development and Reform Commission (SDRC), in Beijing Monday. China is to reduce the amount of treasury bonds to be issued next year to 110 billion yuan (13.3 billion US dollars) and shift the focus of government investment to economic restructuring and promoting balanced growth.

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China's economy is expected to grow 8.5 percent this year, said Ma Kai, minister in charge of the State Development and Reform Commission (SDRC), in Beijing Monday.

Ma said at a national work meeting on development and reform that gross domestic product (GDP) was to top 11 trillion yuan (US$1.3 trillion) this year. The economy showed a good momentum that had been long expected over the past few years.

Noting that China improved economic efficiency while maintaining a rapid growth, he predicted that profits of industrial enterprises would grow 40 percent to 50 percent this year.

Ma said that as the economy grew bigger in size, the economic structure also improved. He said high-tech industries contributed some 23.7 percent to the growth of industrial output in China this year.

He said that as government policy continued to show its effect on stimulating economic growth, the economy had become more and more dependent on its own forces to grow.

According to SDRC figures, the total investment in fixed assets was to top 5.3 trillion yuan this year, 23 percent more than last year. The majority of the investment was financed by corporate funds or bank loans, instead of government investment. The investment by collective and individual persons also saw a faster growth rate than last year.

Ma said the country had steadily pushed forward various reforms and opened wider to the outside world. According to the SDRC's estimate, China's exports would reach 820 billion US dollars this year, increasing more than 30 percent over last year.

The rapid economic growth had brought about more benefits to the people, Ma said, predicting that per capita disposable income of urban residents would grow 8 percent this year, while per capita income of rural residents would grow 4 percent. More than 8 million new jobs would be created around the country this year.

Fewer treasury bonds planned for 2004

China is to reduce the amount of treasury bonds to be issued next year to 110 billion yuan (13.3 billion US dollars) and shift the focus of government investment to economic restructuring and promoting balanced growth.

Ma said that though the Chinese government was to maintain a certain scale of public borrowing next year, the main purpose would no longer bestopping a downward slide in the economy and stimulating growth.

The government issued a total of 140 billion yuan of treasury bonds this year, on top of 660 billion yuan of T-bonds issued over the previous five years. Ma said the current economic situation was turning for the better, with corporate profits growing and non-government investment on the rise. Therefore, he said the size of T-bond issuance can be scaled down.

Ma said the T-bond money for the next year would be used mainlyon improving living and production conditions in rural areas and building facilities of public health, basic education, grass root administration and law enforcement authorities.

The money would also be used on supporting development of western parts of the country and rejuvenation of the old industrial zones in northeast China, accelerating technical renovation and upgrading of traditional industries and renovating coal mines.

Ma said environmental protection, big water conservancy projects and key construction projects would also receive funding from T-bond issuance.

Ma said China had to maintain the pro-active fiscal policy because the economy has yet to develop a solid basis of self-dependent growth. The government has still huge debts in terms of infrastructure, social welfare, ecological systems and environmental protection.

He said the ongoing construction of T-bond-funded projects still require some 1 trillion yuan of investment. As the country invested heavily in the development of an emergency public health network and nine-year compulsory education for all children in western areas, a certain amount of government spending was needed, Ma said.

By People's Daily Online

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