7 percent GDP growth target not low for China: minister

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Last updated at: (Beijing Time) Monday, March 08, 2004

7 percent GDP growth target not low for China: minister

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The seven percent GDP growth target set for this year is not low for China and it does not mean China has changed its macroeconomic control policies, said Ma Kai, minister in charge of the State Development and Reform Commission Monday.

If China could maintain a seven percent growth in the years to come, without drastic ups and downs, the country can well attain its goal of building a well-off society in all aspects by 2020, Ma said.

The seven percent growth target is proposed by Premier Wen Jiabao in his Government Work Report to the legislature.

The Premier pledged to continue the incentive package for domestic demand, the activist fiscal policy and prudent monetary policy, Ma said.

China hit 9.1 percent in GDP growth in 2003, despite the impact of SARS epidemic, a record since the Asian Financial Crisis in the late 1990s.

But Ma admitted that China has achieved the fast GDP growth at the expense of resources and environment.

China contributed to about four percent of the world's total GDP in 2003 by consuming 7.4 percent of the oil, 31 percent of the coal, 27 percent of steel, 25 percent of alumina and 40 percent of the cement, consumed worldwide.

China has to develop at a moderate rate in order to ease economic and social conflicts, meet the growing demand of the people and realize a well-off society in all aspects by 2020.

Such a moderate growth may help ease the pressure on resources and environment that have already much been strained after years of hectic growth, put an end to the single-minded pursuit for growth, leaving space for improving the quality of the economy and adjusting the economic structure, Ma said.

Pragmatic goal

Deputies to China's top legislature laud the 7-percent economic growth rate for 2004 as a "scientific and pragmatic" goal. The growth target, the same as that for 2003, has been set by Premier Wen Jiabao in his report to the legislature Friday and led to heated discussions among 2,900-plus deputies from all walks of life.

"It is a realistic and pragmatic goal and will help maintain the continuity of China's macro-economic policies," said Qin Chijiang, a deputy to the ongoing Second Session of the 10th National People's Congress (NPC), and deputy secretary-general of China Finance Association.

The goal, if materialized, will bring China the Gross Domestic Product (GDP) totaling some 12 trillion yuan (1.45 trillion US dollars) in 2004, laying a solid foundation for implementation of the 10th Five-Year Plan (2001-2005) and construction of a well-off society in an all-round way, according to Qin.

The low-profile growth rate will ease the pressure on resources and environment after years of rapid economic growth, and put an end to the practice of seeking solely economic growth rate, so as to improve quality of the economy and adjust economic structure, said NPC deputy Zhang Kui from north China's Shanxi province.

In 2003, the Chinese economy grew by 9.1 percent despite the outbreak of the Severe Acute Respiratory Syndrome (SARS), hitting a new record since the Asia Financial Crisis in late 1990s. However, over-heated investment in some economic sectors also resulted in a growing pressure on resources and environment.

Last year, China consumed 31 percent of the world's total coal output, and its consumption of iron ore, steel and cement accounted for 30 percent, 27 percent and 40 percent of the total global output respectively, but the country contributed merely less than four percent of the total GDP output worldwide.

"Economic growth powered by huge resource consumption cannot last long. Even if the growth target is accomplished, it will not be conducive to China's economic growth. If the reported overheated investment in a few economic sectors is not inhibited, the overall economic situation will be affected, and a greater cost had to be paid," said auditor deputy Zhang Chengqi from north China's Hebei province.

"There is no absolute standard of determining whether the economic growth rate is high or low, acknowledged NPC deputy Qin Chijiang. "The crux of matter is an efficient speed." Therefore, he called for relinquishing the use of economic growth as the sole criteria for judging officials and evaluating their merits.

By People's Daily Online

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