Premier Wen expects 7% economic growth in 2004

Home>>Business

Last updated at: (Beijing Time) Friday, March 05, 2004

Premier Wen expects 7% economic growth in 2004

Chinese Premier Wen Jiabao said Friday in Beijing that his government wants a seven percent economic growth for 2004. The target is set for a "stable and rapid economic growth without drastic fluctuations".

DISCUSSION

CHINESE

SEND TO FRIEND

Chinese Premier Wen Jiabao said Friday that his government wants a seven percent economic growth for 2004.

The target is set for a "stable and rapid economic growth without drastic fluctuations", according to the government work report made available to press prior to the opening of the Second Session of the 10th National People's Congress, the top legislature.

China registered a stunning economic growth of 9.1 percent in 2003.

In his report, Wen pledged that the government will adhere to the policy of expanding domestic demand and continue to implement a proactive fiscal policy and a prudent monetary policy this year.

The premier did not give an explicit assessment on whether the Chinese economy is on the brink of an overheating state or not, but he listed economic foes such as "excessively broad scale of investment, the serious problem of haphazard investment and low-level, redundant construction in some industries and regions".

The government plans to cut this year's construction treasury bond issuance by 30 billion yuan to 110 billion yuan, Wen said.

China began issuing such bonds in 1998 in a bid to expand investment to stimulate the then slowing economic growth.

The issuance of construction treasury bonds is an interim policy adopted during a period of insufficient demand and their scale should be reduced gradually as the increase in nongovernmental investment accelerates, Wen said.

Meanwhile, the government should make full use of the role of monetary policy, appropriately control the size of credit and optimize the credit structure to support economic growth while fending off inflation and financial risks, he said.

The consumer price index (CPI), a barometer measuring inflation, rose 1.2 percent in China last year. The prevailing view of domestic economists points to a further CPI increase in 2004.

The basic focus of this year's economic work is to safeguard, guide and utilize the enthusiasm of all sides for accelerating development in order to achieve stable and rapid economic growth without drastic fluctuations, said Wen.

The Chinese premier pledged to strengthen and improve macro-control and maintain stable and rapid economic growth, when he delivered a report on the work of the government at the opening of the Second Session of the Tenth National People's Congress.

In setting a target for this year's economic growth of around 7percent, the central government has taken into consideration both the need for continuity in macro-control and the relationship between the pace of economic growth and the conditions for its attainment, including supply and demand in energy, important raw and processed materials, and transport capacity, also taking into account the need to alleviate the pressure on resources and the environment, according to the premier.

This target also encourages all sides to focus on deepening reform, adjusting the economic structure and improving the quality and efficiency of economic growth and to devote more financial and material resources to promoting social development and strengthening weak links, he said.

"To ensure effective macro-control, we need to maintain consistency and stability in our macroeconomic policies while adjusting the intensity and focus of policy implementation at the proper time and to an appropriate degree in response to developments and changes in the economic situation," Wen said.

He explained, "By 'at the proper time,' we mean seizing the opportune moment for introducing control measures by observing small clues that may indicate what is coming in order to forestall any possible trouble. By 'to an appropriate degree,' we mean that macro-control should neither be too loose nor too tight and that we must not apply the brakes too hard or apply control measures too rigidly."

Wen pledged that the China must adhere to the policy of expanding domestic demand and continue to implement a proactive fiscal policy and a prudent monetary policy.

China to appropriately control scale of investment

The government will appropriately control the scale of investment in fixed assets and firmly halt haphazard investment and low-level, redundant construction in some industries and regions, Premier Wen Jiabao said.

Guided by market forces, the government will use a comprehensive range of measures, mainly economic and legal means supplemented by any necessary administrative measures, to strengthen guidance and control, Wen said.

First, industrial policies and planning should be improved and the information release system for industries should be improved to correctly guide nongovernmental investment.

Second, the government must quickly formulate and revise standards for admittance into industries and enforce market admittance strictly. Projects that do not meet standards for environmental protection, safety, energy consumption, level of technology or quality and have not yet been started should be blocked and those already under construction should resolve such problems, while those already completed should be upgraded within a specified time.

Third, land-use management must be improved in accordance with the law. No land should be approved for projects that fail to meet the requirements of the state's industrial policies and standards for admittance into industries. The government should continue clearing up problems relating to development zones and rectifying and standardizing the land market.

Fourth, auditing and oversight of credit transactions must be strengthened. Financial institutions should not make any loans to new projects or rebuilding and expansion projects that do not meetthe requirements for market access.

Fifth, the taxation system must be tightened and the practice of introducing unauthorized tax privileges must be stopped and rectified.

"On the basis of these measures we will strive to optimize the investment structure, keep the overall investment volume at a reasonable level and improve returns on investment," Wen said.

In order to take a new road to industrialization, China must base the national economy and society on IT and upgrade the industrial structure, according to the premier.

To ensure stable and rapid economic development, China must alleviate the current disparities between supply and demand in energy, important raw and processed materials and transport capacity, he said.

The premier went on to say that balancing investment and consumption is an important aspect of this year's work for macro-control. He said that consumption occupies too small a proportion of China's GDP, noting this is not conducive to ensuring a stable increase in domestic demand, sustaining rapid economic growth and establishing a beneficial economic cycle.

The government must work hard to increase the incomes of both urban and rural residents and raise their purchasing power.

Questions?Comments? Click here

China to continue independent foreign policy of peace: premier

China will never allow anyone to split Taiwan from China: premier

>> Full Coverage

Japanese media follows changes regarding 3 ' most-wanted' things for Chinese families ( 2 Messages)

It is unexpectedly easy to defeat "China Threat" theory: Japanese economist ( 17 Messages)

Scientific concept of development crucial to China's future growth: Premier ( 4 Messages)

China issues human rights record of the US ( 4 Messages)

China to promote "cocktail weight loss therapy" in response to WHO plan ( 2 Messages)