BEIJING - China's
economy will continue to steam ahead at 10% in
2007 and the government is adopting new policies
to improve economic growth.
Major economic
think-tanks agree that the growth rate will again
hit double digits in 2007.
The World Bank
is predicting 9.6%, the Chinese Academy of Social
Sciences has chipped in with 10.1%, the State
Information Center is hedging its bets with a
range of 9.5-10.5%, and the
State Council Development and
Research Center plumped for 10%.
"'Stable
growth' is the key phrase in the central
authorities' plans for next year's economic
performance," says a statement issued by the
central authorities at the end of the high-profile
Central Economic Work Conference last month.
"The most important thing for next year's
economic performance is to keep the economy
growing at a stable and relatively fast rate and
prevent any big ups or downs."
Analysts
said strong momentum and a host of supporting
factors are contributing to growth.
"Supply factors are positive," said Li
Xiaochao, director of the comprehensive affairs
department of the National Bureau of Statistics.
Energy and transport bottlenecks that hampered
economic growth have been alleviated, and banks
are ready to supply funds, he said.
In
addition, investment, consumption and exports all
remain at a high growth level.
More key
national projects will start construction this
year, and profit margins are expanding for most
ventures. Exports will continue to surge.
"China's exports growth will continue to
roar ahead and its trade surplus will last for
quite some time," said Zhang Liqun, an economist
with the State Council's Development and Research
Center, a government think-tank.
The
worldwide economy is expected to grow 3.9-4.9% in
2007, a continuation of the strong growth since
the 1970s, he said. "The external environment will
be quite favorable to Chinese growth," said Zhang.
To bring the growth under control, China
has decided to maintain current fiscal and
monetary policies while addressing critical
problems in its economic growth.
Lawrence
Greenwood, vice president of the Asian Development
Bank, said in Beijing recently that the domestic
challenges China is facing cover social
development, income disparities between rural and
urban areas and environmental degradation.
Judging from the eight economic priorities
listed in the central government's plan for this
year, Chinese officials are well aware of the
problems.
China has said domestic
consumption should be boosted. It also plans to
increase imports and encourage investment abroad.
In a bid to expand domestic consumption,
the government plans to invest more in rural areas
to help farmers earn more, and in the central and
western parts of the country.
In addition,
the government has decided to spend more money to
help the unemployed, lower-income families, and to
provide the poor with better medical care and
education this year. As a result, households may
need to save less and can consume more.
China has decided to combat pressures
created by an overflowing trade surplus, the need
to put too much money into circulation, and the
deterioration of the environment.
China
recorded a trade surplus of US$157 billion during
the first 11 months of 2006, up US$55.1 billion on
the figure for the whole of 2005. "The
international payments imbalance has not gone
away, and may take a long time to resolve," said
Zhang Liqun.
China is trying to face up to
the environmental degradation caused by headlong
growth. But it remains to be seen whether
energy-guzzling and polluting sectors can be
reined in.
The government has made
protection of the environment a top priority for
this year, but needs to map out specific,
effective measures in the coming few months.
"We need to take advantage of the
favorable conditions and bring China's growth onto
a scientific and harmonious track," said Ma Kai,
minister in charge of the National Development and
Reform Commission, the country's top
economic-planning body. "It is much more important
than to have some higher percentage points of
growth."
Despite fast economic growth, the
Ministry of Finance said China will continue the
prudent fiscal policies that it has followed since
2005.
China saw rising inflation threats,
excessive rapid growth of investment in some
regions or industries and bottlenecks of coal,
electricity, petroleum and transportation supply
in 2003.
Since 2005, the Chinese
government began to follow prudent fiscal policies
that are different from the proactive or
expansionary policies it has undertaken since 1998
to avoid the overheating of the economy, said
Ministry of Finance (MOF) spokesman Zhang Tong.
The government's prudent fiscal policies
focus on controlling deficit, improving economic
structure, promoting reform, increasing revenue
and decreasing expenditure, he said.
The
government began to change the direction of its
fiscal policies by adjusting the scale of
long-term Treasury bonds for development and
optimizing the use of Treasury bonds for investing
in projects.
According to MOF statistics,
the deficit in the central budget decreased by
19.23 billion yuan ($2.5 billion) last year for a
year-on-year decline of 0.4 percentage point.
Zhang Tong said China has been expanding
its fiscal expenditure in the agriculture,
education, public-health and social-security
sectors in recent years.
The MOF
appropriated 14.2 billion yuan as direct subsidies
to more than 600 million grain planters this year.
As part of its prudent fiscal policies,
the MOF has tried to minimize the income gap by
improving income-distribution policies and
supporting the construction of an energy-efficient
and environment-friendly society by changing the
tax structure, said Zhang Tong.
By the end
of September, 182.4 million people had basic
old-age insurance, 150 million had basic medical
insurance, 110 million had unemployment insurance,
94.47 million had work-related injury insurance
and 22.3 million urban poor have got subsistence
allowances in China, according to MOF statistics.
