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Home >> Opinion
UPDATED: 17:07, March 11, 2005
Macro-economic controls remain the key tasks
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Many NPC deputies said the macro-economic control measures played a key role in China's economic development in 2004 in their panel discussions on the government work report. The measures successfully pushed forward the faster and better development of the national economy. The deputies noticed that the government work report has explicitly pointed out that the macro-control work cannot be relaxed this year. And those macro-economic control measures should continue to be maintained and improved.

Last year China's agriculture saw a favorable turn in grain production, ending a five-year slide in grain output with a more stable grain price and an increase of farmer's income. The favorable situation in agriculture has played a vital role in stabilizing the overall situation in the country. It is no doubt that macro-economic control has played an important role. However the realities have reminded us: there is no fundamental change that agriculture remains a weak link in the national economy as a whole. There is no obvious improvement for agriculture, especially for the comprehensive production capacity of grain production. It is still very difficult to further increase grain output and farmers�� income.

Last year there was a dropping curve for the social investment in the fixed assets in the country. It was dropped from an increase of 43 per cent in the first quarter to the whole year growth of 25.8 per cent. Although there was a little expansion in total investment the rebounding pressure remained strong. What is a long-term, arduous task is that there is no obvious improvement in the investment structure. There has been no fundamental change that China��s economic growth still mainly relies on the expansion of fixed investment. From the total quantity of fixed assets investment the investment volume of social fixed assets surpassed 7,000 billion yuan in 2004, the total investment for projects still under construction was some 20,000 billion yuan, a higher level in history. In December more than 20,000 new projects started their construction. From investment structure of industries, the growth of industrial investment was still faster. There merged new blind investment issues that some localities and enterprises started construction of electric power stations in violation of the relevant regulations while the investment scope for overheated industries including iron and steel, cement and electrolytic aluminum was still comparatively large. The investment expansion will lead to the shortage of coal, electricity and petroleum, which will eventually lead to the investment growth for some relevant industries.

Talking of coal, electricity, petroleum and transportation, they may be the most real and urgent issues and also the issues that the common people are most concerned about. Behind the issues there have been hidden the in-depth contradictions that resources environment restricts economic development. In recent years, China��s economic growth has been on the high speed indeed and also paid high cost for it. According to the prevailing foreign exchange rate China��s GDP was accounted for 4 per cent of the total of the world in 2003, which consumed 7.4 per cent of the world��s crude oil; 31 per cent of coal; 30 per cent of iron ore; 27 per cent of steel; 25 per cent of aluminum oxide; and 40 per cent of cement. From the present situation, there is still the shortage of coal, electricity, crude oil and transportation with the shortage of coal being more severe. In a short term of view, the resource restrictions must be solved by the way of relaxing the supply and demand contradictions of coal, electricity, crude oil and transportation. From a long term of view, macro-control should be applied to the structural readjustment and in the end the growth way by over-consumption of resources in the economic development should be changed.

Priority will be given to the adherence to intensification and improvement of macro-control in the four areas of work in this year��s economic development set by the government work report. Either from the present economic operation or from the long term goal of economic development we can well be aware of the fact that the socialist market economic system will make market play a fundamental role in resource configuration under the macro-control. "The fundamental role" and "the state macro-economic control" are the two essential contents forming the socialist market economic system. On this sense, there is no such a problem of when the macro-control will come to en end.

By People's Daily Online

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