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Tuesday, July 25, 2000, updated at 15:28(GMT+8)

China's Economy Has Shown a Major Favorable Turn

Shrouded no longer by murky mist but a favorable wind helping steam ahead the Chinese economy in full sail since start of the year. Statistics have already revealed an 8% more GDP growth in China in the first half of the year. According to authoritative departments, China's economy will achieve a complete turn by the end of the year from a decreased year-on-year growth rate in the past.

The economic boat of China has already sped out of its foggy past and sails now on open seas under the warmth of sunlight. As things are represented by an upward trend, there is the country's troika moved by increased consumption demand, a growing amount of investment made and a speedy growth of export trade developed. China's economy is in good shape, it has taken a favorable turn for the better in the first half year without doubt. There are certainly many new economic growth points and bright spots in China when one looks into economic advances of the country.

From east coastal areas to desert lands of China's west, a multitudinous number of infrastructure projects have been launched or are under construction. From "Spring Festival" days, "May Day" leaves and people's tours south and north there is already a boom of tourism in China. People are in great throngs to make wide choices of housing estates in cities. Many export-oriented industrial enterprises, having been loaded and even overloaded with export orders, have to switch to top gear and put in extra hours to fulfil production quota. Transportation departments are at a time of their busiest and have suffered from a tight supply of vehicles and carriages for their customers¡­.

To be in short, that is how things have been carrying on in China since start of this year and what a fine rising scene is unfolding in the country's economy thanks to large amounts of investment being used, greater consumption capacity reported and increased exports developed.

Statistics by experts already point to a continuous growth in fixed assets and even a speedy monthly increase of these in China. In the first half of this year, state-run and other types of enterprise undertakings have accomplished an estimated amount of over 600 billion yuan of investment.

Social retail sales of consumer goods are estimated at a total of 1.6 trillion yuan, showing a growth of 11%, or a 4% increase over the same period of last year.

Exports are placed at 110 billion USD, up more than 30% over the same period of last year. Meanwhile, a speedily rising amount of export trade has been developed by the country with its chief partners, especially with the Republic of Korea, the ASEAN countries and Russia.

An overall quality improvement has also been made in the country's economic performance as shown by those figures released.

A 20% growth has been registered in investment in technological innovation and reform. A two digital growth of investment has been seen in central and western China, at a higher growth rate than that in the country's east. Following a restructuring of industries and other production lines, a fine prospect has been presented in contributing to a sustained growth of the Chinese economy.

Consumption has come to show its effect in bringing about a growth of the Chinese economy. From "Spring Festival" and "May Day" leaves two "golden consumption weeks" have been created by a population of over 90 million touring all over China. Accrued to state coffer are 34 billion yuan from tourism. A flourishing housing market also shows its fullest attraction to people in China and this is as told by a greatly increased floorspace of as much high as over 50% in the first half of this year over the same period of last year. What is more, 90% of like housing purchases have been made by individuals. This points to the fact that tourism and housing estates deals are areas in bringing an upbeat economy in China.

Machinery and electrical appliances are high-added value export items that have contributed duly to a growth of the Chinese economy. Take exports items of these in the first five months of this year in the province of Guangdong. Altogether 18 billion USD export earnings have been achieved to show a 40% growth over the same period of last year, thanks to an improved product mix of exports developed in Guangdong.

In a word, an overall economic recovery has been achieved and quality advances made in industrial and other production lines in China following a rising market demand both at home and abroad. Through years' effort great success has been made by Chinese enterprises in developing the country's economy. This is as shown by an all-time high of comprehensive economic indices, a greatly increased amount of profits and a big cut of economic losses by various types of manufactories and enterprises throughout China. A large number of state-owned enterprises are included for their great success made in carrying out reform and lifting themselves out of various economic impasses or difficulties. Statistics show that over 50% of large and medium-sized state-owned and control enterprises have extricated themselves from past debts. For a restructuring of production, the country's textile industry has as a whole reaped a profit of as much high as 8 billion yuan in the first five months of this year, showing a 3. 4-fold growth over the same period of last year. Big profits have also been made by many state key enterprises going in for metallurgical, oil and petrochemical production in China

Needless to say, a sound economy is being developed at present in China. The first half of the year has seen a bull stock market rising in the country with an accumulated advance price to lead the others throughout the world. Altogether there is a total of over 3470 billion yuan of A-share stocks (more than 10% growth over deals contracted last year) having been created in Shanghai and Shenzhen. Effective macro adjustment and control along with an upbeat international market has enabled the Chinese economy to enjoy the "enchanting sight of spring time".

When we choose the same coordinate to mark China's economic development this year and the last, it must be a 7.6% GDP curve line growth in the first half of last year. Against this, a skid to 7.4% followed in the third quarter and a further drop to 7.1% by the end of the year. But since start of this year, in the place of the curve line was an upbeat growth momentum.

Things would be unthinkable with the development of the Chinese economy when macro control and economic restructuring by the state should be excluded aside from an upbeat international market without.

Since outbreak of the Asian financial crisis in 1997, the Chinese Government has always stuck to a policy of "self-reliance through hard working" and efforts to "expand domestic demand", "increase export trade" and "go in for macro economic control and restructuring". It sees to it that a series of policy measures as proactive fiscal policy, a sound monetary policy and policies for a restructuring of economy and SOEs, west development strategy and others are timely introduced. As things stand in China now, these policies and measures have shown their fullest effect in bringing about a happy growth of the Chinese economy.

A fact to be noted is that since the second half of last year many rigorous policy measures were introduced in China for creating a favorable environment in pushing ahead the Chinese economy. These include 60 billion yuan of treasury bonds and 200 billion supportive bank loans for an expansion of domestic demand in the second half of last year. Particularly noteworthy are 9 billion yuan of treasury bonds used for technological renovation by key industrial enterprises along with 100 billion yuan of new treasury bonds issued this year in bringing about an overall growth of the Chinese economy.

Among the various aforesaid policies and measures are also included new wage increases by the state to help people with a medium- and low-level income for increased consumption in cities throughout China. Accordingly, an extra amount of 54 billion yuan of state allocations were made from state coffer to benefit a population of as many as over 84 million in the second half of last year. In addition, with college recruitment and rearrangement made of holiday leaves there has also ushered in a springtime of Chinese education as a national industrial undertaking to be developed and the rise of a new economy on holidays in China.

Meanwhile, efforts were made to see to it increased export trade be developed in every possible way. In the second half of last year, China further raised its tax rebates for exports. New credit loans were timely issued for increased exports along with an expansion of the right to developing export business by enterprises on their own. Since July last year, China has achieved a steady recovery of its economy, thereby putting an end to a year-on-year drop in trade amount of the country's export.

An authoritative view from state authoritative departments for macro economic control and restructuring is that macro economic control and restructuring has been focusing on a coordinated development of the Chinese economy. It centers not only on an immediate economic growth but an accumulation of strength for new speedier economic advances in the new century.

China's economy needs a relatively speedier growth rate. Only in so doing there is the possibility for a lessening of the pressure of employment, upgrading the structure of industries, reinforcing and building up national defense and raise of people's living standard.

How to have a good grasp on opportune chances offered and how to maintain the upbeat momentum of the Chinese economy in the first half of this year must be regarded as the main theme to be studied in guaranteeing the sustainable growth of the Chinese economy.

Some experts hold that China's downward trend arising from slowing economic growth has been basically checked under the joint reaction of policies ensuring sustained economic growth and the pressure of market force. It is under the stimulus of short-term favorable factors there is the upswing of the Chinese economy and that in China today there still lacks a basic dynamic motivating force to push up continuous growth of economy.

Why such a conclusion? It is because no adequate demand has been raised and that investment in China for the present has to rely on funds from treasury bonds and slowing support of social funds. Big budgetary cuts will lead to less investment, cut economic benefits by enterprises and a withering of consumption demand. The Chinese economy would likewise develop in the way it "sails fast first" and then be forced to cut speed.

In view of the Chinese economy currently developed, some research institutions have put forward such a view that China is at present in a stage of an average growth of 10% during the 80s and 90s and a stage of an average growth of 7% in the early 21st century. This is to say that instead of a two digital growth a 7% growth rate seems to have set the new advance pace of Chinese economy in the future.

The unspoken word of such a conclusion is that the economic growth mode of China should be based on a growth of consumption instead of a rising amount of investment. Consumption must be regarded as the motivating force pushing up economic growth. Investment to be made should proceed from a growth of consumption demand. In other words, investment should meet the demand of consumption and be used in upgrading the structure of industrial production.

A look into China's economic developments shows that investment has played its stimulus role in bringing about a growth of the Chinese economy at present. We should in no way slacken our effort in sticking to pro-active fiscal policy and a sound monetary policy to maintain the upbeat momentum of the country's economy in the second half of this year. For new economic advances to be made in the new century, we must see to it that new economic growth cycle be studied, good consumption environment created, various stimulus policies introduced and new bright spots found in the way China's economy is going to sail on a new voyage¡­.

In This Section

Shrouded no longer by murky mist but a favorable wind helping steam ahead the Chinese economy in full sail since start of the year. Statistics have already revealed an 8% more GDP growth in China in the first half of the year.

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