State Looks to Loosen Economic Planning

China has made remarkable progress in making its planning economic system more market-oriented over the Ninth Five-Year Plan period (1996-2000), a spokesman for the State Economic and Trade Commission said.

"The Chinese Government has made it clear that planning should be in line with the demands of a socialist market economy macro-control system," the spokesman said.

The planning departments wanted to focus on the big picture, while loosening control over specific economic activities during the period, he said.

In 1998, the planning departments announced that they would no longer set quotas for commercial banks' fixed asset investment loans, policy-related loans and yearly loan plans.

With a move to improve the efficiency of macro-control under a market economy, a comprehensive co-ordination mechanism was established among China's relative departments such as planning, fiscal and finance, the spokesman said.

The macro-control departments put forward planning indicators such as economic growth rate, fixed asset investment growth rate, consumer price index and fiscal revenues after consulting with relative departments.

The macro-control departments also co-ordinated relative departments to better carry out the country's policies, he said.

In the past years, the State Development Planning Commission, Ministry of Finance and People's Bank of China set up a special group responsible for speeding up infrastructure construction to expand domestic demands.

The group has arranged a total 310 billion yuan (US$37.3 billion) for investment through issuing treasury bonds, which greatly fuelled the country's economic development.

With the aim of accelerating the reform of the country's investment and financing system, the State Development Planning Commission drafted a detailed scheme to give enterprises their own decision-making power and give commercial banks the independent right to approve loans, the spokesman said.

The country also began to carry out a bidding system for fixed asset investment.

During the Ninth Five-Year Plan period, the planning departments beefed up supervision over key economic activities, the spokesman said.

The State Development Planning Commission has sent spectators to key projects, he said.

"The planning departments have taken a series of measures to create a fair market order," the spokesman said.

The country also improved the method which maps out medium and long-term plans to make them more open and scientific, he said.

The State will increase its purchase of major products such as farm products, agricultural materials and basis industrial products in the coming years.

Meanwhile, the country will improve the reserve system of major products for central and local governments, the spokesman said.

It will also improve access to information and make good use of laws to regulate the market, he said.

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