Let macro-adjustment and control lead economic development

[2009-01-15 10:41:38]

In light of the deteriorating global financial crisis and declining domestic economy, the CPC Central Committee and the State Council have decided to make a series of major adjustment on macro-control policies through carrying out proactive fiscal policy and flexible monetary measure. The decision also ensured a huge economic stimulus package of four trillion yuan, or some 586 billion US dollars to bolster weakening domestic economy and enhance stable economic growth.

Although the achievement is hard won, the challenges are still laying ahead. A series of new policies have clearly signaled the urgent need for stable and rapid economic growth. All these efforts strengthened the determination and confidence of all Chinese to face challenges, overcome difficulties as well as achieve economic and social development.

The year of 2008 is extraordinary for China for the country is devastated by natural disasters one after another, which hindered the steady economic development. Meanwhile, with global economic slowdown being more and more prominent, external environment for China's economic growth faces an unprecedented challenge.

"The ten measures to expand domestic demand stipulated by the executive meeting of the State Council recently is a crucial policy in a crucial period," commented Zhang Qizuo, vice director of China International Economy Society.

Given the new changes in domestic economy, the Central Committee and the State Council kept the right direction, focus and pace for macro-control, and immediately switched the priority from "preventing economy from developing overheated and curbing inflation" early this year to "maintaining steady and rapid economic growth and restricting rising commodity price". Meanwhile measures taken to raise the tax rebate for some textile and garments also played an important role in stablising economy.

In the first three quarters, among the three impetuses of China's economic growth, better know as the "troika", with an exception of consumption, which still recorded a relatively high growth, export and investment both registered sharply decline, a year-on-year decrease of ten percent if price factor was not taken into consideration. If measured by the fluctuation of economic index, China's economic slowdown could be clearly witnessed.

Macro-control policy guarantees steady and rapid economic development

At present, fiscal and monetary policies have undergone great changes, and will have major impact on future economy. The central goal of these policies is to enhance steady and rapid economic growth.

Implementation of a proactive fiscal policy was a successful experience China has drawn from the Asian financial crisis in 1998. It will definitely attract investment and stimulate economic growth by carrying out a proactive policy, expanding fiscal expenditure and enlarging government investment, the investment by the CPC Central Committee in particular.

China has adopted more proactive fiscal policies since July, including more spending on weak links, more favourable policies to benefit farmers, a high rate for tax rebate, encouragement for people to buy their first house and long-term infrastructure construction, which aimed at expand domestic demand while stabalising export.

Some flexible monetary policies have been taken since the middle of the year. Central bank announced rate cuts for three times and reserve rate cut twice, which aimed at easing credit supply.

Currently, China is developing in an overall way, with stronger comprehensive strength, steady and healthy financial system, high residents saving rate, sufficient labour supply and so on. So far there are less pressure on price hike and enough room for macro-control policy. Enterprises have become more and more prepared for market changes, and were capable of turning crisis into opportunity.

Macro-control focuses more on quality and benefit

According to the meeting, investment expansion must have a focal point, be chosen carefully, be managed effectively and be line with quality and benefit.

The ten measures not only attach importance to economic growth, but also to investment expansion and restructuring. The policy serves as a good combination of growth and reform. Some issues that hider the social and economic development can be addressed through investment expansion. Meanwhile, some problems pertaining to people's livelihood such as "three rurals", ecological protection and infrastructure can also be improved.

The policy this time aims at finding the root of economic growth, and it can be seen as a way to boost confidence. China can achieve a nine percent economic growth if the world economy is well on track.

By People's Daily Online