Current Economic Situation and Macro-Control Policy Orientation 　　This article, written by Zeng Peiyan, minister of the State Development Planning Commission, focuses on these four points: I. The basic situation regarding the operation of the national economy in the first half of this year; II. Main problems existing in the current economic operation; III. The economic development trend and domestic and international environment in the second half of the year; and IV. The macro-control policy orientation. The four points are elaborated as follows: 　　I. Since the beginning of this year, various regions and departments, acting in line with the essence of the central economic working conference held late last year and of the Second Session of the Ninth National People's Congress this year, have continued to implement the pro-active fiscal policy and further expand domestic demands. As a result, the national economy as a whole has maintained a favorable development momentum. In the first quarter, the gross domestic product (GDP) increased 8.3 percent, with the growth rate rising by 1.1 percentage points over last year's same period. The economic growth rate in the first half of this year will continue to be higher than that of last year's same period. The agricultural cultivation structure was somewhat readjusted, summer grain output increased over last year's same period. Industrial production kept a rapid growth, there was a restorative pick-up in enterprise efficiency. 　　There was a fairly rapid growth in fixed asset investment and a steady sale on the consumer goods market, financial operation remained stable, the state's foreign exchange reserves continued to increase, the exchange rate of the Renminbi remained stable. Practice proves that without the central authorities' correct policy decisions, the present favorable situation would not have emerged. 　　II. China's economic life contains both the contradictions accumulated over a long period of time in the past and newly emerged problems. Since March and April this year in particular, some new changes have taken place internationally and domestically, China's economic development is faced with fairly complicated external environment, some problems arising in economic operation have come to the surface. --A fall in export trade and a sharp drop in trade surplus.--Inadequate consumption demand.-A slow-down in fixed asset investment growth.-A continued fall in the general price level.-And a slow progress in the economic structural readjustment. 　　III. There exist both many favorable conditions and some unfavorable factors for economic development in the second half of the year. Viewed from the international environment, there has been a marked increase in unstable and uncertain factors in the international political and economic field since the beginning of this year. Asian economic recovery has brought both opportunities and new competition and challenge on China's export and utilization of foreign capital. On the whole, the world economy will still operate at a low grade this year, there will be no great expansion in the capacity of the international market. Viewed from domestic factors, the rapid economic growth maintained in the first half of the year has laid a sound foundation for economic development in the second half of the year. At the same time; the rise in the industrial production-marketing ratio, the fall in the growth rate of finished products and the pick-up in enterprise efficiency have provided a fairly big room for movement for expanding production in the next six months. On this basis and through strenuous efforts, it is possible to achieve the various anticipated economic targets for the year. Of course, it should be noted that the effect of the pro-active fiscal policy adopted since the second half of last year is further weakening. There will not be big increase in social investment demands, and there will be insufficient reserve strength for growth in fixed asset investment. Consumption demand will remain insignificant. Due to a fall in export and rapid growth in import, trade surplus will witness a sharp drop from last year. 　　An analysis of the present situation shows that total demand and economic growth may continue to slow down somewhat in the second half of the year, and it is difficult to reverse the situation characterized by the continued fall in the general price level. This situation will inevitably increase the difficulty in achieving the anticipated economic targets for the year and solving various economic and social contradictions, it will also adversely affect next year's economic development. 　　IV. The 50th founding anniversary of the People's Republic and Macao's return to the motherland at the end of this year both require a good economic and social environment. Some problems existing in present economic activity can only be resolved more satisfactorily in the course of development. To deal with the problems existing in China's economic development and prevent major economic fluctuations, we should lose no time to adopt comprehensive counter-measures for macro-economic control, so as to ensure the sustained, rapid and sound development of the national economy and maintain social stability. 1. Continuing to apply a pro-active fiscal policy and intensifying implementing efforts; 2. Striving to give play to the role of the monetary policy. It is necessary both to guard against financial risk and actively support economic development; 3. Working hard to increase the incomes for medium- and low-income urban households and farmers, and to urge residents to expand consumption; 4. Vigorously developing the education undertaking in line with the requirement of the strategy of reinvigorating the country through science and education and the will of consumers; 5. Trying by every possible means to expand export; 6. Liquidating the policy adopted under the condition of a "seller's market", that restrains investment and consumption demands and encouraging rational investment and consumption demands; 7. Speeding up the process of putting housing distribution on a money basis; and 8. Accelerating the pace of structural readjustment. 　　We believe that under the correct leadership of the Party Central Committee with Comrade Jiang Zemin at the core, and through the common efforts of all nationalities of the country, the various anticipated economic targets for the year can definitely be achieved. Economicnews 1999-07-14 Page2 Full Story in Chinese