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China's Economy Must Tackle Six Major ProblemsChina's economic development during the next Five-Year Plan (2001-2005) period must tackle six major problems, says the latest issue of Outlook, the country's most authoritative news weekly. The April 3 issue says in a signed article that great changes, such as the disappearance of shortage of commodities and the forming of a buyer's market, have taken place in China during the current Five-Year Plan (1996-2000)."The changes mark a completely new stage of development for the Chinese economy," the article says, adding that these changes demand that greater effort must be made to solve six major problems. According to the magazine, the first problem facing the economy will be how to maintain the economic growth rate while improving the quality of economic growth. In the past years when domestic demand was huge, it was not difficult to raise the economic growth rate by channeling more investment into the national economy. However, it becomes more difficult to support high economic growth in a period of technological innovation bringing with it new and more expensive products and equipment, it said. The second major problem will be how to quicken reform while emphasizing national stability. When the Chinese economy enters a period of enhanced efficiency, more effort will be needed to perfect the new mechanisms of risk limitation and resources allocation. The reform of labor, income distribution, social security, government functioning, macro-management, and the market system is also expected to be deepened. All this and more will inevitably touch upon the established interests of many people, which in turn will have an impact on overall social stability. The magazine said that the third major problem will be how to achieve sustainable development while efforts are taken to speed up the country's industrialization process. As the world's most populous country, it is necessary that China should push forward its industrialization. However, the fact that the country's per capita natural resources and space is quite limited means that it must pay enough attention to sustainable development in the process. "The fourth problem will be how to cope with constraint on economic structure upgrading posed by the expanded migration of rural workers," the magazine says. China's industrialization calls for the shifting of rural labor to urban areas. However, this trend contradicts the necessity of pooling capital and resources into capital- and technology- intensive industries, which needs fewer workers. It will become a major challenge for China to complete structural optimization and industrial upgrading while gearing the economy more to both the domestic and international markets, the magazine notes. In the early 21st century, the Chinese economy will become more integrated into the international economy. "This will pose a severe test for China's capital- and technology-intensive industries," it says. While China's labor-intensive industries still enjoy some cost advantages, the capital- and technology-intensive industries are at a great disadvantage in competition with their foreign rivals. The article predicts that the last problem China will have to face will be how to best deal with the relationship among reform, stability, and development. In the next few years, the change in China's economic growth mode and the deepening of its economic restructuring will inevitably lead to sharp conflicts of interests. In particular, China's huge work force, expected to reach 860 million people by the end of this year and 910 million by the year 2005, will pose a great challenge to the country when slipping economic growth offers fewer jobs, the magazine points out. "The 10th Five-Year Plan (2001-2005) will become the transitional period for both our economic development and our economic structure," it says. The nation must keep a clear mind while seeking the proper development path in a fiercely competitive global environment, the article concludes.
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