Clear Understanding of Situation, Maintenance of Development Momentum

This is the first article in a series by People's Daily Commentator on striving for achievement of this year's economic growth targets. Following is the full text of this commentary.

Since the beginning of this year, the global economic growth rate has slowed down, while China's economy has continued to increase rapidly, with the GDP growth rate reaching 7.9 percent in the first half of the year, presenting a favorable economic situation.

The first year of the new century is also the year marking the start of China's 10th Five-year Plan. Under the correct leadership of the Party Central Committee with Comrade Jiang Zemin at the core, various regions and departments are conscientiously studying and implementing the important thought contained in the "three represent's", working hard to carry out the spirit of the Fifth Plenary Session of the 15th Party Central Committee and the Central Economic Working Conference, they have adopted a series of measures to promote economic development: Persistently expanding domestic demands, continuing to implement a proactive fiscal policy and a steady monetary policy, maintaining the continuity of policy and necessary dynamics; persistently taking structural adjustment as the main line, breaking through the traditional idea of regions seeking a balance of food supply, expediting the market-oriented purchase and sale of food in the main food-marketing areas, promoting the adjustment of agricultural structure; continuing to reduce and eliminate the surplus and backward production capacity, strengthening policy guidance and financial support for the development of high-tech industries, accelerating the cultivation of new economic growth points; persisting in actively and steadily promoting various reforms, controlling reform efforts within the bearing extent of economy and society, and maintaining the general situation featuring social stability; striving to increase export trade, opening wider to the outside world and, through further improving the investment environment, enlarging the investment area; persistently rectifying and regulating the order of the market economy, resolutely cracking down on various illegal activities in the economic and circulation areas, creating a favorable environment for reform and development, etc.

These practical and effective measures have made it possible to keep fairly rapid growth of the national economy in the first half of the year.

However, we should also take note of the fact that currently, there exist many uncertain factors in both the international and domestic economic situation and there are still many difficulties in our way forward. In terms of the international environment, along with the continued slowdown in the economies of the United States, Japan and other developed countries and the resurgence of trade protectionism, their negative effect on China's economy has been gradually revealed and expanded. Their visible manifestations are as follows: the global economic slowdown and the reduction in orders for products have entailed a glide in China's exports to some major trade partners, there was a fall in the export of electromechanical and textile products and other bulk commodities, some countries have adopted even more severe restrictive measures against China's export commodities. Export trade volume turned from the growth of 13.7 percent early in the year to a fall of 0.6 percent in June, trade surplus in the first half of this year dropped to US$8.1 billion from US$12.4 billion in the same period last year. In regard to the domestic situation, after the change from a long-term deficiency of food grain and other main agricultural products to a basic balance between total supply and total demand, the structural contradiction of agriculture and the rural economy has become more prominent, the slow increase in farmers' income, particularly the decline in the income of farming households in some main grain producing areas, has become a major problem restricting social and economic development. In addition, investment and consumption, the two pillars boosting economic growth in the first half of the year, have also witnessed signs of inadequate reserve strength and growth difficulties. These are the grim realities and challenges we must face up to in the sustained and sound development of the national economy.

Analysis of the reasons for our achievements and awareness of existing difficulties and problems have helped us stay clear-headed. We also have many favorable conditions, we have got out of the more than two-year-long economic depression by utilizing foreign capital and have witnessed a tangible economic upturn. In the first six months of this year, direct foreign investment in place hit US$20.7 billion, a 20.5 percent growth; with the beginning of June, there was an active change in export trade, July saw a 6.6 percent growth of export, with the growth rate being 7.2 percentage points over the previous month; urban and rural residents' income increased 5.5 percent and 4.2 percent respectively, the balance of residents' savings deposits exceeded 7,000 billion yuan, thus making it possible for further expanding consumption; in the first half of this year, the fixed asset investment of society climbed 15.1 percent over the same period last year, in the second half of the year, the government investment effort is kept unabated, the newly added State treasury bonds will continue to play their role; at the same time, non-governmental investment has gradually become active along with policy relaxation and the lowering of the threshold of market access; the effort to rectify and standardize the order of the market economy has been crowned with initial results; the goal of the reform of State-owned enterprises and getting them out of difficulties has been realized by and large, enterprises' profitable level has risen somewhat; the promotion of the development of western regions, the success in Beijing's Olympic bid, China's imminent entry into the World Trade Organization-these bright points will all bring us new business opportunities and provide us with favorable conditions and an important foundation for accelerating development and maintaining rapid economic growth for the year.

Work in the next few months is vitally important to maintaining the good momentum of economic development. Recently, the Party Central Committee and the State Council have made new arrangements for doing this year's economic work well and have further clearly defined the key tasks for the next few months. As long as we have a clear understanding of the situation, reinforce our confidence, face up to difficulties, advance despite difficulties, stimulate the enthusiasm of various quarters, strive to overcome various difficulties and unfavorable factors in our advances and constantly expand the fruits of victories, it is entirely possible to attain the economic growth targets of the whole year.

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