Macroeconomic Policies to Promote Economic Growth ����China will actively adopt macroeconomic control policies this year to promote economic growth and overcome the negative impact of the worsening foreign trade situation and sluggish consumer demand. ����Necessary financial and monetary policies will be introduced by the Chinese Government to sustain rapid economic development at a time when the country's export trade faces dim prospects for a growth in 1999. Efforts will be made by the country to remove institutional obstacles confronting the consumer structure, according to analysts of the Macroeconomic Research Institute under the State Development Planning Commission. ����The analysts pointed out that fiscal measures offer the best choice since the government has tried almost every possible banking mechanism a market-oriented country could possibly use for macroeconomic control. ����Pro-active financial policies China adopted in 1998, including RMB$100 billion yuan in special bonds issued to commercial banks to improve infrastructure construction, are yielding positive results. However, the major contribution of the bond issue to gross domestic product will surface this year, according to experts. Finance Minister Xiang Huaicheng said last week that China will continue the pro-active fiscal policy and plans to issue RMB$316.5 billion yuan worth of treasury bonds in 1999. He added that the National People's Congress might adjust the budget during the implementation process. ����Issuance of additional treasury bonds should be incorporated into overall national plans to promote the central finances. Efforts should also focus on optimizing the term and structure of bonds in order to tap the potential to bear additional deficits, according to experts. ����China's deficits are expected to hit RMB$105.3 billion yuan in 1999, compared to RMB$96 billion yuan in 1998. The increase will mainly go for water conservancy and infrastructure projects, according to Xiang. ����Economists responded positively to increased financial expenditures, but at the same time suggested that the government should avoid competitive sectors and instead invest heavily in the military and space industries since technology developed by the two sectors is crucial for upgrading traditional civilian techniques. ����Macroeconomic control should center on creating and maintaining a standardized macroeconomic environment, especially at a time of a slowdown in economic development. Related efforts should bolster and reinforce the expectations and confidence of investors. Fiscal policies should also be used to support bank loans for medium- and small-sized enterprises. ����Experts warned that China's long-term sustainable, rapid and stable economic growth is to rely on a deepening of reform and further opening as well as the fulfillment of basic consumer demand. ���� Economicnews 1999-01-14 Page2 Full Story in Chinese