China's Macro-Economic Control Measures Pay OffA senior Chinese official said that China's macro-economic control measures during the Ninth Five-Year Plan period (1996-2000) have achieved prominent results, with the national economy maintaining sustained growth.Zeng Peiyan, minister of the State Development Planning Commission, told Xinhua in an interview that during this period, China implemented pro-active fiscal policies while firmly expanding domestic demand. The country also successfully overcame difficulties resulting from the Asian financial crisis and accomplished major tasks set in the five-year plan. He said that the successful implementation of macro-economic control measures have created a beneficial environment for promoting reforms, exploiting existing productive forces, easing employment problems and protecting social stability. During the Ninth Five-Year Plan, the control of inflation was the primary task of macro-economic control and high inflation was effectively reined in to achieve a "soft landing", he said. In the second half of the five-year period, China implemented the pro-active fiscal policies, adopted a series of stable monetary policies and effectively controlled a deflationary trend by issuing treasury bonds, expanding investment and taking other measures, thus sustaining the growth momentum of the national economy. He said that since 1998, China has issued 360 billion yuan in treasury bonds. The money was mainly used to build infrastructure projects in areas of water conservancy, transportation and power; to support technological advancement in enterprises; to increase investment in an ambitious national program to develop China's western areas as well as biological and environmental construction; and to increase input in education, scientific and technological infrastructure. Since 1996, the central bank has lowered deposit and loan interest rates for seven times, exploited many monetary policy tools and appropriately increased money supply to motivate social investment, which gave a powerful drive to the country's economic growth. Meanwhile, attention was also paid to coordinated expansion of investment demand, readjustment of income distribution policies and kick-start of consumption demand, he said. In 1999, while continuing to expand investment in fixed assets, China implemented a series of policy measures including wage increases, timely compensation for laid-off workers, pensions for the retirees and increases in farmers' incomes, in order to readjust income distribution and encourage consumption. "These measures effectively boosted consumption and spending, resulting in a condition of driving up the economic growth by both investment and consumption," he said. While expanding domestic demand, China has adopted effective measures to boost export, including the improvement of export tax rebate policies, raising export tax rebate rates, expanding the foreign trade rights of productive enterprises, improving export credit insurance mechanisms and increasing banks' support to foreign trade enterprises. He said that another focus of the macro-economic control policies is accelerating structural readjustment, which includes readjusting agricultural planting structure, increasing investment in infrastructure, guiding enterprises to increase input in technological upgrading, supporting medium- and small-sized enterprises and promoting the development of China's western areas. Judging from present conditions, most of the macro-economic control targets in the Ninth Five-Year Plan will be reached, Zeng said. During the five years, the annual average growth of GDP was approximately eight percent, with the natural population growth rate being lower than 10 per thousand. This year, China's per-capita GDP is expected to exceed 850 U.S. dollars. Total foreign trade volume will surpass 400 billion U.S. dollars and foreign exchange reserves will double that of 1995. According to the minister, the registered unemployment rate in urban areas will be lower than four percent, poverty continues to decrease and the State's poverty-relief plan will be realized by the end of this year. "From the practices in recent years, we not only have had successful experiences in controlling inflation, but also found some effective measures in expanding domestic demand, promoting economic growth and prohibiting the tendency of deflation," he said. He added that these comprehensive macro-economic control measures have largely enriched China's macro-economic control policies, gradually formed a comparatively complete macro-economic control policy system and provided a guarantee for sustained, fast and healthy development of the national economy. |
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