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Restructuring to Be Main Theme of Next Five-Year PlanRestructuring will become the major theme when China maps out its next Five-Year Plan of economic and social development, according to the upcoming issue of Outlook, China's most authoritative news weekly.The April 3 issue of the magazine notes that the 10th Five-YearPlan (2001-2005), which is being deliberated by related government departments, will largely be devoted to economic restructuring rather than development. This view is also held by Ma Jiantang, director of the NationalEconomy Department under the State Economic and Trade Commission. After 15 years of rapid expansion, China's economic growth witnessed a year-on-year decline beginning in 1993, and was especially noticeable in the current Five-Year Plan period (1996-2000), the official said. In 1992, China's gross domestic product (GDP) grew at a rate of 14.2 percent. The GDP growth rate slipped to 10.5 percent in 1995 and was down to 7.1 percent in 1999. The decline of economic growth has not been a short-term one, Ma said, adding that it also should not be attributed to either external factors or government economic policies, though these have played some role in the process. The official maintained that three major intrinsic economic factors are responsible for China's declining economic growth. First of all, the country's production capacity for ordinary industrial products has been excessive. This situation began to emerge as early as the first years of the eighth Five-Year Plan period and became especially evident in the ninth Five-Year Plan period, Ma said. The official noted that the main propeller for China's previousrapid economic growth was the shortage of goods, as these shortages aroused huge investment impulses which resulted later inenhanced production capacity and higher economic growth. Yet, when it came to the early 1990s, the once-hungry domestic market began to see an over-supply of goods for the first time. Secondly, advances in the information economy and technology have led to decreased demand for the products of traditional industries, the official noted. For instance, the country's energy consumption for every 10,000yuan (about 1,200 US dollars) of the GDP averaged 2.3 tons in 1995,but this figure dropped to 2.0 tons in 1996, 1.9 tons in 1997, andabout 1.5 tons in 1998. "This means that technological advances and the information economy can't in themselves guarantee the rapid and sustained growth of the economy," Ma said. "While new economic growth spots are fostered in the process, some traditional growth areas began to be eliminated," he said. He particularly stressed the importance of restructuring the Chinese economy in the new century. "If the country can't adjust to the challenge swiftly, the macroeconomy will naturally come to a decline." Thirdly, the domestic market for China's leading traditional consumer products has already become relatively saturated. Previous development of the country's consumer markets have suggested that leading consumer products changed from time to time,Ma said. At one time in China, it was bicycles, watches, and sewing machines that topped the shopping lists of Chinese consumers. Then,it was television sets and refrigerators. Now, computers, cars, and apartments dominate. However, Chinese consumers are now very reluctant to open theirpurses, which prevents the new consumer goods from becoming the driving forces behind domestic consumption. As the new consumer goods are more expensive, the capital accumulation process has been prolonged, Ma said. The decrease of family income for a considerable segment of the population, especially urban labors and farmers, also poses an impediment. "Over the next five to ten years, China will remain in a periodof readjustment, with particular efforts to ease the excessive production capacity and to rid itself of backward equipment and management," Ma predicted. To cope with this not-so-promising future, Ma proposed that thecountry step up restructuring and speed up the development of new products. In the meantime, efforts should be made to quicken the shifting of key consumer products. Before these two requirements are completed, it would be quite natural and logical for China's economy to grow at about seven percent a year, the official said.
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