NDRC releases comprehensive economic plan

16:03, April 07, 2010      

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The National Development and Reform Commission (NDRC), China's top economic planning agency, called for stronger regulation on the real estate market and more effective risk-monitoring on the yuan exchange rate in an article published on the Chinese Central Government's Official Web Portal (Gov.cn) yesterday.

The NDRC also urged the establishment of the multi-level capital market and the expansion of direct financing scales of the services industry.

Regulation on the real estate market

The NDRC vowed to increase residents' consumption power, with more active employment policies, adjustments on the distribution system of national income and reform of income distribution in monopolist industries. It will also raise subsidies in agriculture-related sectors, lift the minimum grain purchase prices and improve migrant workers' employment environment, in order to boost the sustainable growth in farmers' incomes.

It is notable that the NDRC emphasized housing consumption in the article. It urged large-scale development of low income housing, stronger control over the real estate market and more supply of commercial residential housing.

Besides the improvement of stimulus policies for home appliance, car and housing consumption, the NDRC proposed to promote services consumption, including cultural products, information, tourism and old-age services.

Pricing reform

The NDRC pointed out in the article that China should deepen reform in taxation, finance and investment mechanisms. The reform involves the improvement of transfer payment system and public budget mechanisms, adjustment of the taxation system and the improvement of state-owned assets supervision and administration.

The establishment of a multi-level capital market and the development of small and medium-sized financial institutions are emphasized by the NDRC. It called for an improved financial regulation system, private equity (PE) and venture capital (VC)-management mechanisms.

As for the reform of resource product pricing and environmental protection fees, the NDRC vowed to promote reform of power, water and natural gas pricing, formulate guidance for emission trading pilot programs and complete resources compensation and pricing mechanism.

Yuan rate monitoring

For the steady development of China's foreign trade, the NDRC called for the restructuring of China's foreign trade and the growth points. It will support the export of labor-intensive products, in which China has comparative advantages, as well as the export of products that have independent intellectual property.

The NDRC also paid closed attention on effect of imports in satisfying domestic demand and rebalancing international payments. "China should increase imports of advanced technology, key equipment and components, important energy resources and raw materials," says the article.

As for the yuan exchange rate issue, the NDRC urged a stable yuan exchange rate at a rational, balanced level. Exchange rate monitoring, analysis and the publication of risk indicators are also emphasized, in order to reduce export-oriented enterprises' risks and losses.

Financing of services industries

The NDRC will encourage large and medium-sized cities and regions with fair conditions to form services industries-dominated industrial structure, and enhance policy support.

Government funds and private investment will be guided to flow to service sectors. Financial institutions are urged to develop financial products for service providers. VCs and credit guarantee corporations are encouraged to cooperate with service enterprises and institutions to expand to financing scales of the services industry.


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(Editor:祁澍文)

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