Economy

SOCIAL ECONOMIC DIVISION ADMINISTRATIVE DIVISION GEOGRAPHICAL FEATURES NATURAL RESOURCES CLIMATE POPULATION, ETHNIC GROUPS POLITICAL SYSTEM ECONOMY

Select by clicking the following topics :

ECONOMY AGRICULTURE INDUSTRY AND CONSTRUCTION INVESTMENT IN FIXED ASSETS TRANSPORTATION POSTS AND TELECOMMUNICATIONS BANKING, SECURITIES AND INSURANCE DOMESTIC TRADE FOREIGN ECONOMIC RELATIONS

To Learn About China

Join us to find out if China Economy is a Bubble

http://www.China-Hiking.com

U.S. government says China not currency manipulator

UPDATED: 09:05, May 11, 2006

The U.S. Treasury Department said on Wednesday that China was not a currency manipulator but pledged to "actively and frankly" push China toward faster exchange-rate flexibility.

In a delayed report to the U.S. Congress on its trade partners' currency practices, the department announced it would not brand China as a country that was manipulating its currency to gain unfair trade advantages.

The U.S. government is required to report every six months to the U.S. Congress and cite any countries that the United States believes are manipulating their currencies for trade purposes.

The current report was delayed from its deadline of April 15.

While the Bush administration has been pressuring China to allow its currency to rise in value against the U.S. dollar in the two years, the U.S. government has not designated China as a currency manipulator, a process that would trigger consultations between the two nations.

Source: Xinhua

http://english.peopledaily.com.cn/200605/11/eng20060511_264695.html

Buying Chinese goods saves Americans $100 bln a year

UPDATED: 17:33, November 30, 2005

The Sino-US economic and trade relations are among the most important bilateral economic relations in the world. Over the 26 years since China and the United States of America established formal diplomatic relations, bilateral economic relations have developed rapidly with cooperation having expended to various areas of economy.

The Sino-US trade volume has grown from the $2.5 billion at the beginning to $169.4 billion in 2004. By the end of 2004 the US has invested in 45,000 projects in China, increasing in-place investment to $48 billion. From January to October this year trade between China and the US reached $127.3 billion, up by 26.2 percent year on year. The US is currently the second largest trade partner of China while China is the US' third.

In recent years the fastest growing market for US exports is in China ( China was the 9th largest market for US exports in 2001 and by 2004 it has grown to be the fifth). In the first eight months this year US exports to China for the first time exceeded those to the UK and China has become the fourth largest market for US exports. From 2001 to 2004 annual growth of US export was 4.45 percent in average. During the same period US export to China grew by 21.85 percent each year while the Netherlands, the fastest growing market among the rest of the top ten markets for US exports, had a growth rate of only 7.65 percent.

Mutual benefits and win-win result are the remarkable features of the Sino-US economic and trade cooperation. China and the US complement each other in terms of economy. Strengthening the bilateral economic and trade cooperation benefits the economies of both countries as well as the two peoples.

For a long time China's exports to the US not only promote China's development but also satisfies demands in the US market and helps save Americans' expenses. A report by Morgan Stanley shows China's low-priced quality products have saved American consumers over $600 billion over the last ten years and $100 billion in 2004 alone. Take children clothes for example. Young American parents spend $400 million less because of purchase of Chinese goods. At the same time, American businesses also make huge profits. China created 4 to 8 million jobs for the US in 2004. On the other hand, Chinese imports from the US bring obvious benefits to both sides. China imports huge amounts of farm produce such as wheat, soybeans, oranges as well as airplanes and fertilizer to meet China's production and living needs, which at the same time effectively sustains America's economic development and employment.

American businesses also see generous returns from investments in China. American investments in China involve a variety of areas including industrial manufacturing, telecommunications, banking, insurance, science and technology, transportation, agriculture and catering industry etc. According to Chinese statistics, American-funded businesses in China sold goods worth $75 billion in the Chinese market in 2004 and sold about the same amount of goods to other markets. The US Chamber of Commerce in China released a white paper on American businesses in China recently. Its survey of its member companies shows 93 percent American-funded business in China believe the Chinese economic reform has improved business environment for American businesses. Ninety-two percent said their forecasts of business in China are optimistic or cautiously optimistic at least for the next five years. Eighty-six percent of the surveyed have seen improved returns, sixty-eight percent either are making money or have very high rate of profitability while 42 percent report profitability higher than their global average. The white paper believes American businesses have strong confidence in China's business environment and hope to solve business problems through constructive dialogues. It fully demonstrates that American investments in China not only helps the development of the Chinese economy but also brings unprecedented opportunities to American businesses.

The article is written by Liao Xiaoqi, Vice Commerce Minister of China and published on the overseas edition of the People's Daily on Nov.30; Translated by People's Daily Online

http://english.peopledaily.com.cn/200511/30/eng20051130_224707.html

Do not blame China for job losses in the US

UPDATED: 09:16, May 09, 2006

Many Americans, influenced by US media, believe that their jobs are being stolen by competitors from China.

This opinion, which is widely bought by workers in manufacturing sectors, has great influence on the US Government.

In view of this, it is necessary to analyze the employment situation in the United States.

The transfer of traditional industries overseas constitutes one of the major reasons for job loss in the United States.

Expensive US labour costs have led to the shifting of primary manufacturing industries to other countries where the price of labour is much lower.

The core competitive edge of the US economy lies in technological innovation, service industries and high-tech manufacturing. Transferring traditional industries overseas helps the country focus on developing the industries in which it enjoys advantages over other economies.

This strategy can enhance its international competitive power as much as possible and also brings fat profits to US companies.

But workers in sectors that have become hollowed out have to look elsewhere for employment, and this is a major problem. When their old skills fail to meet the requirements of new posts, they face unemployment.

On the other hand, China is not the only country affected in this kind of industrial transfer.

The bulk of Chinese exports to the United States are labour-intensive products. If China stopped exporting such products to the United States, the Western nation would not engage in making these goods anyway. And other countries would fill the vacancy.

Scientific and technological progress and the increase of productivity have robbed many Americans of their jobs.

Since the beginning of the 1990s, US companies have invested heavily in IT, automation and artificial intelligence technologies, which have helped raise the productivity by large margins. But wide application of new technologies and the sharp enhancement of productivity have led to job redundancies.

Of course, there is still a huge demand for workers in newly emerging sectors. But the posts created by these new industries are less than the jobs lost in traditional sectors. This renders the employment pressure all the more serious.

In addition to those in traditional sectors, many US high-tech workers have also lost their jobs recently as a result of the bubble burst of high-tech shares on the stock market.

Worst of all, US high-tech firms, big and small, compete with each other to transfer IT-related jobs to countries such as India, where the pay and welfare level are much lower than those in the United States. They do this in order to cut costs to the minimum and reap the highest possible profits. This again costs many Americans their jobs.

Statistics indicate that about 300,000 computer-programming jobs have so far been transferred from the United States to India. And the tendency looks likely to continue.

At the same time, some financial institutions on Wall Street, following the examples of the high-tech companies, have also shifted some high-salary monetary analytical posts to India.

US research firm ForrestResearch predicts that about 3.3 million US white-collar jobs in service industries will be transferred to lower-wage countries, chiefly India, by 2018. This is bound to give rise to more serious problems.

The situation is compounded by the fact that many Americans find it difficult to adapt to new posts once the sectors where they are working decline, owing to their inability to keep up with the changing times, or to their low educational or training levels. Many employment opportunities are therefore missed.

Job hunters have been subjected to higher education requirements because the United States is shifting from a manufacturing-orientated economy to a knowledge-based economy over the last decade or so.

The figures released by the US Labour Department show that the unemployment rate for those who received education below senior high was 6.5 per cent in November 2000 but rose to 9.2 per cent in January 2003.

Many unemployed people with low education levels are unwilling or unable to learn new skills, while keeping their job expectations high and hoping to get posts in their old sectors with generous pay.

In the meantime, the US economy is suffering, which drags down the US public's consumption confidence and their consuming power as well.

This necessarily results in weak domestic demand, and 70 per cent of the US economic growth is powered by demand.

Insufficient domestic demand makes it hard for the US economy to recover. This, in turn, worsens the employment situation. Rising unemployment renders consumption all the weaker. A vicious cycle is triggered.

Recent statistics, however, suggest that the US economy shows signs of recovery. It is believed that the employment situation will take a turn for the better if the recovery maintains its momentum.

Taking all this into account, the blame on China for robbing Americans of jobs is unfounded.

Some Americans see only the transfer of funds, technology and employment opportunities to China but turn a blind eye to the fact that good and cheap Chinese consumer goods lower Americans' consumption costs. They also forget that the US-headquartered multinational corporations are the biggest beneficiaries of the industrial transfer.

They should realize that the unemployment problem is the necessary consequence of economic globalization and that the problem signifies a necessary phase through which the US economy is undergoing.

Source: China Daily; By Guo Di, he author is a Beijing-based economics researcher.

http://english.peopledaily.com.cn/200605/09/eng20060509_264072.html

China's development benefits US economy: American attorney
www.chinaview.cn 2005-08-27 12:49:44


WASHINGTON, Aug. 26 (Xinhuanet) -- The US economy has benefited greatly from China's economic growth, and "simply blaming China will not solve issues relating to US economic transformation," an American expert on anti-dumping laws said Friday in an interview with Xinhua.

"China and the United States are the twin engines of world economic growth. China's economic development has numerous beneficial effects on the US economy," said Jeffrey S. Grimson, 38, Counsel and Chair of the China/International Trade Practice of Kaye Scholer LLP, an international law firm with over 500 lawyers on three continents.

Foremost, "Chinese goods have a reputation for being low-priced. The availability of low-priced goods has had a beneficial impact on the US economy, by enabling consumers to enhance their standard of living while keeping inflation down," said Grimson who have been working in the field of anti-dumping laws for 15 years.

Chinese products are moving up the scale of quality too, he added.

Also, economic prosperity in China means more potential customers for US goods and services, he said.

What's more, "the rise of China as a manufacturing superpower has pushed US business to modernize and achieve ever higher levels of efficiency and productivity," said Grimson.

Grimson holds that it is not right for US manufacturers to blame China for a decline in US manufacturing jobs, saying "the transformation of the US economy started long before the current 'crises' with China's trade imbalance, the currency, or textiles. Simply blaming China will not solve issues relating to US economic transformation."

According to statistics compiled by the US-China Business Council, he said, the US manufacturing sector's share of the US economy has fallen from 32 percent in 1960 to 22 percent in 1980, and to 14 percent in 2002.

Grimson noted that "in fact, the decline in the contribution of the US manufacturing sector to the overall economy began long before China's emergence" as a major trade power.

On the bilateral economic and trade relationship, Grimson said the overall economic and trade ties between China and the United States are built on a strong foundation of mutual benefit, and the fact that the relationship is not viewed in the United States as a "two-way street" is in part because the US-China trade statistics are typically viewed in isolation, rather than in broader regional terms.

For example, less than half of the US trade deficit in 2004 is related to trade with East Asian countries, including China, he said, while "overall, the US trade deficit with the rest of the world has increased nearly three times as much as the trade deficit with China over the past ten years."

Because of the negative perception of the US-China trading relationship, trade disputes that might otherwise be considered an expected consequence of such a large volume of trade take on a whole new political aspect, Grimson noted.

"Groups interested in curtailing free trade are able to capitalize on the negative political environment to achieve objectives that might not otherwise be attainable," he said.

It is essential for the two countries to handle trade disputes in an objective, transparent fashion, abiding by fundamental principles of fairness in addition to merely the strict letter of international and domestic law, said Grimson.

"For the United States, abiding by international trade agreements is paramount to maintaining global credibility as a country committed to open markets not only abroad, but also at home," he said.

"Unilateral action is not the ideal way to resolve trade disputes," Grimson noted, "Quotas, especially unilateral quotas, are the opposite of what the international free trade rules seek to achieve."

Grimson has traveled to China many times over the past 10 years. When asked about his impression of the Chinese economy, he said that the pace of growth of China's economy is unprecedented.

"China is speeding through decades of development in only a few years. As such, the country has the opportunity to learn from the mistakes of countries. In particular, China can look to the lessons of other developed countries in areas such as urban planning and the environment," he said. Enditem

http://news.xinhuanet.com/english/2005-08/27/content_3409927.htm

US citizen expelled out of China for selling pirated DVDs
www.chinaview.cn 2005-09-29 17:51:37

BEIJING, Sept. 29 (Xinhuanet) -- US citizen Randolph Hobson Guthrie III has been expelled from China for selling pirated DVDs Thursday and handed over to the US police, according to Chinese Ministry of Public Security.

Guthrie, born on Jan. 19, 1967, and his accomplice, Cody Abram Thrush, were arrested by the Chinese police in July last year on charges of selling pirated DVDs. The police confiscated over 210,000 pirated DVDs on the spot.

The two were sentenced to two and a half years and one year in prison respectively by the Shanghai No. 2 Intermediate People's Court, and both would be expelled from China after serving their sentences.

The court also found the two Americans guilty of selling some 130,000 pirated DVD copies to foreign countries, such as the United States and Britain, through the Internet between Nov. 3, 2003 and July 1, 2004, reaping illegal profits worth some 970,000 yuan (117,000 US dollars).

The two ran a commercial website at www.threedollardvd.com and sold the pirated DVDs at a price of three dollars per copy, according to the court verdict.

The court also ruled that the two Americans would pay a fine of 500,000 yuan (about 60,500 US dollars) and 10,000 yuan (some 1,200 dollars), respectively.

Abram was driven out of China on July 1.

The case suggested piracy is a global problem without national boundaries, a spokesman for the ministry told Xinhua.

"The Chinese police will go on increasing cooperation with other countries, including the United States, to fight international crimes under the principle of understanding, trust and equality," the spokesman said. Enditem
http://news.xinhuanet.com/english/2005-09/29/content_3563525.htm

Roundup: Hu Jintao expounds China's stance on win-win cooperation

UPDATED: 08:29, November 18, 2005

Chinese President Hu Jintao on Thursday expounded China's stance on win-win cooperation by urging the APEC member economies to increase mutual understanding through communications and to strengthen cooperation while seeking greater mutual understanding.

Delivering a speech entitled "An Open Mind for Win-Win Cooperation" at the Asia-Pacific Economic Cooperation (APEC) CEO Summit in South Korea's southeastern port city of Busan, the Chinese president said that building a harmonious world with an open mind is a basic prerequisite to win-win cooperation.

Hu arrived on Thursday in Busan, the second largest city in South Korea, to attend the APEC Economic Leaders' Meeting scheduled on Friday and Saturday with the main theme of this year--"Toward One Community: Meet the Challenge, Make the Change."

Meanwhile, the three-day APEC CEO summit was kicked off here on Thursday morning.

The summit is an annual event that gives business leaders from the Asia-Pacific region to participate in highly interactive discussions on regional and global economic and trade issues with APEC Economic Leaders, economists, policy makers and fellow business leaders.

The theme of this year's APEC CEO Summit is: "Entrepreneurship and Prosperity: Building a Successful Partnership in the Asia-Pacific Region."

Hu also termed "deepening mutual trust and expanding trade and economic exchanges" as a solid foundation for win-win cooperation.

China encourages well-established Chinese businesses to go global and, within the framework of market rules and laws and in the principle of reciprocity, mutual benefit and complementarity, participate in international economic and technological cooperation and competition, Hu added.

"Setting store by dialogue and consultation, and seeking a proper settlement of disputes is also an important avenue to win-win cooperation," the Chinese president said.

He also described strengthening solidarity and coordination, and maintaining security and stability as an effective guarantee for win-win cooperation.

Non-traditional security issues, such as terrorism, financial risks and natural disasters, are posing a threat to the very existence and development of mankind, Hu said.

STRENGTHEN DIALOGUE AND COOPERATION TO MAINTAIN WORLD ENERGY SECURITY

The Chinese president pledged to strengthen energy dialogue and cooperation with all countries, to jointly maintain world energy security and stability.

"To achieve balanced and orderly growth in the world economy, the international community must handle well the energy issue," Hu told some 800 APEC business leaders.

Since 2004, the Chinese president said, the surge of oil prices in the international market has affected the economic growth of the world economy, developing countries in particular.

"The most critical thing is for all countries to work together for stability of the world energy market, and to fuel the sustained growth of the world economy with sufficient, safe, economical and clean energy resources," the Chinese president said.

It is also important to take a long-term perspective, intensify energy development, deepen energy cooperation, increase energy efficiency, and facilitate the development and use of new energy resource, Hu added.

The Chinese president also briefed the APEC business leaders on China's energy strategy.

"The core of China's energy strategy has been clearly defined. We will strengthen policy guidance for energy conservation and high efficiency, give priority to energy conservation and rely on domestic resources," Hu said.

"While focusing on developing coal resources, we will develop diverse energy resources, and put in place a system that supplies stable, economical and clean energy," he added.

The development of nuclear, wind and bio-power in China has just started, and there is great potential for future development, Hu noted.

Though China's demand for energy has somewhat increased due to its steady economic growth, its consumption volume in per capita is not high, the Chinese president pointed out.

"China is a major energy consumer. But it is also a major energy producer," Hu told the business leaders.

Since the 1990s, China has always met over 90 percent of its overall energy needs on its own. As a country with coal dominating its energy structure, China still has huge potential for domestic supply.

Hu also briefed the APEC business leaders on China's energy conservation.

"We always work to combine energy development with conservation, and give top priority to conservation," he added.

Hu told the business leaders that China has introduced a mid-and long-term energy conservation program, with the objective of saving 3 percent of energy every year by 2020, or 1.4 billion tons of standard coal in total savings.

MAKING FURTHER CONTRIBUTIONS TO A SUSTAINED EXPANSION OF GLOBAL TRADE

Hu also said that China will make further contributions to a sustained expansion of global trade by changing the mode of foreign trade growth, increasing import and enhancing the protection of intellectual property rights.

He said although China has a trade surplus with some regions, it has a deficit with the Asia-Pacific region, Hu said.

Among China's top 10 sources of trade deficit of 2004, six are in the Asia-Pacific region, and the deficit totaled 127 billion US dollars.

"It is not true that China is seeking a big surplus in foreign trade. As a matter of fact, the enormous domestic demand and the broad internal market are the perpetual driving force behind China's economic development," Hu told the business leaders.

Hu also pointed out that global trade imbalance should be viewed from a dialectical perspective and in the context of world economic development.

"International trade expansion has helped optimize the allocation of global resources, and promoted world economic development as well as the well-being of the people of all countries,"Hu said.

Among the CEOs to attend the APEC CEO Summit are Citigroup Chairman William Rhodes, Microsoft Vice President Craig Mundie and Chevron Managing Director Samuel Snyder, along with top executives from Toyota, China Unicom and Hong Kong's Li and Fung Ltd.

CHINA'S DEVELOPMENT NOT TO POSE THREAT TO OTHERS

Hu said China's development will not stand in the way of anyone, nor will it pose any threat to anyone.

"Instead, it will only do good to peace, stability and prosperity of the world," Hu said.

"China is becoming an important driving force behind the economic growth in the Asia-Pacific region and the world as a whole," Hu added.

China's economic development not only benefits the Chinese people, but also provides the whole world with more investment opportunities and a bigger market, he added.

"We will continue to take economic development as our central task and top priority, concentrate on development, and work hard to achieve our goals and, at the same time, make our own contributions to regional and global economic developments," he said.

China will continue to purse the basic state policy of opening-up, conduct extensive international cooperation, steadily improve its investment environment, open its market, and endeavor to achieve mutual benefit and win-win results with the whole world, he added.

Since its inception in 1989 in response to the growing interdependence among Asia-Pacific economies, APEC has become a formidable regional forum acting as the primary regional vehicle for promoting open trade and practical economic and technical cooperation in the Asia-Pacific region.

APEC accounts for more than one-third of the world's population (2.6 billion people), about 60 percent of world GDP and nearly half of world trade.

It represents the most economically dynamic region in the world, having generated nearly 70 percent of global economic growth in its first 10 years.

APEC currently has 21 members: Australia, Brunei, Canada, Chile, China, China's Hong Kong, Chinese Taipei, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Thailand, the United States and Vietnam.

The chairmanship rotates among its members, with South Korea holding the chair this year.

Source: Xinhua

http://english.peopledaily.com.cn/200511/18/eng20051118_222104.html

  China's development brings opportunities to the world

UPDATED: 14:13, April 14, 2005

Over the past 26 years since China adopted the reform and opening up policy, its average annual economic growth has hit 9.4 percent, four times that of developed countries in the same period, three times that of world economic growth and double that of developing countries.

Calculated in accordance with the US dollar, China's GDP (gross domestic product) increased from US$147.3 billion in 1978 to US$1.64 trillion last year, 11 times that in 1978.China's economic development has brought opportunities to the world.

In the opinion of the International Monetary Fund (IMF), China is another locomotive of the world economy following the United States.

Last year, China's GDP, counted by the market exchange rate, accounted for 4.1 percent that of global output, and over 13 percent when counted in accordance with PPP (purchasing power parity), constituting a bigger rate of contribution to world economic growth.

According to World Bank statistics, in the 1980-2000 period, the (PPP) contribution rate of China's economic growth to world economic growth reached 14 percent, second only to America's 20.7 percent, and higher than Japan's 7 percent. In 2000-2003, the contribution rate of China's economic growth to world economic growth reached one-third, higher than America's 13 percent, even when calculated on the basis of market exchange rate, China's contribution also touched 17 percent.

China's economic development has livened up the world market. China's total trade value surged from US$20.6 billion in 1978 to US$1,154.79 billion last year, with its average annual growth standing at 16.8 percent, making it the world's third largest trading country. Asia, with its favorable position, was the first to gain benefit from China.

According to Asian Development Bank, in recent years the economic growth in the Asian region is obviously faster than that in other regions of the world, this is mainly attributed to the rapid development of China's economy. The statistics from Asian Development Bank show that in 1995-2003, world trade grew 5.3 percent annually on average, while Asia's export to China increased 16.9 percent; since 2001, the 50 percent growth of East Asian exports has come from the increase of its exports to China. The 84.6 percent growth of Japan's economy in 2002 was benefited by its exports to China. Secondly, global exports also received benefits. China's import value shot up from US$10.89 billion in 1978 to US$5,614.2 billion last year, making it a big import market worthy of the name.

IMF statistics show that in 2000-2003 the contribution rate of China's commodity import growth to the increase of global exports reached one-third. US commodity export to China last year increased 31.9 percent, notably higher than the 8.8 percent growth rate of its exports to the world.

The opening effect generated in the process of China's economic development has benefited the whole world. China's economic rise is essentially different from Japan's economic marvel because of the salient export-oriented characteristics of China's economy.

The external dependence (trade/GDP) of China's economy rocketed from 1 percent in 1985 to 70 percent last year, while that of the US was 23.6 percent. China has become one of the widest opening markets in the world.

In terms of import dependence, last year China's import dependence (import/GDP) touched 34 percent, higher than Japan's 8 percent and America's 15.2 percent; in terms of import duty, China import duty has plummeted from 55 percent in 1985 to 9.3 percent this year, notably lower than Argentina's 31 percent, Brazil's 27 percent, India's 32 percent and Indonesia's 37 percent; in terms of the outward-looking economy, the exports by foreign-funded enterprises in 2003 accounted for 62.4 percent of China's total exports, while that of Malaysia was 45 percent, Singapore 38 percent, Mexico 31 percent, and the ROK 15 percent.

To sum up, China's economic development has not only made China itself rich, but also is changing relations of the world economy, it is creating a win-win situation together with the world.

By People's Daily Online

http://english.peopledaily.com.cn/200504/14/eng20050414_181040.html

 
China to push for new world of amity: Premier
www.chinaview.cn 2005-10-01 10:27:26

BEIJING, Sept. 30 (Xinhuanet) -- Chinese Premier Wen Jiabao said here on Friday that China will work for building "a new world of peace, amity and harmony" together with the people throughout the world.

Wen made the remarks at a reception marking the 56th anniversary of the founding of the People's Republic of China held in the Great Hall of the People in downtown Beijing.

About 1,000 Chinese and foreign diplomats, scholars and people from all walks of life were present at the reception.

In fact, Chinese leaders and senior officials over the past few months have kept highlighting the new feature of the country's foreign policy: "peace, development and cooperation".

In an article issued in August, Chinese Foreign Minister Li Zhaoxing said that seeking peace, amity and harmony among all countries is a key component of Chinese traditional culture. Under the banner of peace, development and cooperation, the country's diplomacy has kept forging ahead and contributed to safeguarding world peace and promoting common development.

In Asia, China helped its surrounding countries deal with the financial crisis in 1997 and offered the country's largest-ever aid to the tsunami-hit countries in January this year.

China also initiated the Shanghai Cooperation Organization for regional security and economic cooperation and promoted cooperation between China, Japan, the Republic of Korea and the Association of Southeast Asian Nations.

All the facts proved that China is a good neighbor, good friend and good partner of its neighboring countries , Li said.

On the international arena, China has pushed for South-South cooperation and North-South cooperation, explored new areas and channels of mutually beneficial cooperation with developing countries and provided them with assistance within its ability.

Meanwhile, China has forged partnership with the world's major powers, and made common efforts to promote world peace and prosperity.

Besides, China has actively taken part in the United Nations affairs and carried out international cooperation on anti-terrorism, arms control, peace-keeping, development, human rights, law enforcement and environmental protection.

Li Junru, a well-known theorist in the Party, said that China is late in the progress of modernization and industrialization.

"However, we will not repeat the past bitter history of turbulence and instability in the world resulted from the rise of a big power, but seek a road that a new rising nation has never taken," Li said.

Chinese President Hu Jintao told a UN summit meeting in New York earlier this month that China will resolutely insist on the road of peaceful development, the independent foreign policy of peace and develop friendly relations and cooperation with various countries on the basis of the Five Principles of Peaceful Coexistence. Enditem

Premier pledges to build harmonious, well off society

BEIJING, Sept. 30 (Xinhuanet) -- Chinese Premier Wen Jiabao on Friday pledged to promote reforms and opening up and to facilitate a sustained and healthy development of national economy.

Wen made the remark in his address to more than 1,000 celebrities at a reception in the Great Hall of the People on the eve of the 56th anniversary of the founding of the People's Republic of China.

He called on the whole nation to unite under the leadership of the Chinese Communist Party (CPC), heightening the CPC's leading role in China's opening up and reforms and in the great changes that have happened in China.

History has eloquently proved that socialism with Chinese characteristics and the road that Chinese people have chosen are the only right way, Wen said.

He said more efforts should be made jointly with Hong Kong and Macao compatriots to maintain the long-term prosperity and stability in Hong Kong and Macao and with Taiwan compatriots to achieve the China's peaceful reunification.

General Secretary of CPC Central Committee and Chinese President Hu Jintao was present at the reception.

Among the those who were present at the reception included members of the Standing Committee of the political Bureau of the CPC Central Committee, Wu Bangguo, Jia Qinglin, Zeng Qinghong, Huang Ju, Wu Guanzheng and Li Changchun and other party and government leaders. Enditem
http://news.xinhuanet.com/english/2005-10/01/content_3570543.htm

UPDATED: 15:32, October 22, 2005

With a fast growing trade volume, China and the Association of Southeast Asian Nations (ASEAN) are trying to show the world that the planned free trade area will be an accelerator for regional economy.

"Among all the FTA negotiations that China has been in, the negotiation with the ASEAN is definitely the fastest and most fruitful one," said Zhai Kun, a scholar with the China Institute of Contemporary International Relations.

China and the ASEAN have agreed to build up a free trade area before 2010. There were quite some suspicions when this initiative was first brought out in 2001.

Zhai said people were wondering whether the FTA, whose members were all developing countries with similar economic structures, would be finally completed and effectively boost the integration of regional economy.

However, statistics from the ASEAN Secretariat showed that the China-ASEAN trade volume has been growing at an average speed of 40 percent over the past three years. In 2004, the trade volume surpassed 100 billion US dollars.

"There is little doubt that the trade volume between China and the ASEAN will reach 200 billion US dollars before 2010," an anonymous official with China's Ministry of Commerce said at the ongoing China-ASEAN Expo, held in Nanning, capital of Southwest China's Guangxi Zhuang Autonomous Region.

Zhai said so far China and the ASEAN have completed the negotiations on trade in goods and are beginning talks on the fields of investment and services.

Beginning from July, China, Brunei, Malaysia, Indonesia, Myanmar, Singapore and Thailand gave tariff cuts to each other on 7,455 kinds of commodities. The practice was launched in compliance with the Trade in Goods Agreement of a Framework Agreement for Overall Economic Cooperation between China and the ASEAN countries.

Experts believed that implementation of the tariff cut plan would enormously expand trade between China and the ASEAN, and would be of far-reaching significance in the future development of China-ASEAN economic and trade relations.

By 2010, China and six old ASEAN member nations, including Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, will impose zero tariffs on most normal products, while China and the other four new ASEAN members of Cambodia, the Laos, Myanmar and Vietnam will do the same in 2015.

China now mainly imports from ASEAN countries electronic products, crude and liquefied petroleum and gas and vegetable oil, and exports electronic and machinery products, textiles and garments, processed oil and cereals to the ASEAN.

A research from the Thai University of Chulalong Korn said that the China-ASEAN FTA, once completed, would contribute to a 0.9 percent GDP growth to the ASEAN countries and a 0.3 percent rise to China.

The China-ASEAN FTA has a population of 1.8 billion and two trillion US dollars in gross domestic product (GDP). It will become the third largest global trading region after the European Union and the North American Free Trade Zone.

Source: Xinhua

http://english.peopledaily.com.cn/200510/22/eng20051022_216063.html

An important factor in world integration

The beginning of the 21st century and the next few decades is a period when major changes will take place in global new technological revolution. The high-tech wave now sweeping the world is causing unprecedented changes and adjustments in the whole international relations.

Since the middle of last century, although international relations have received great impact from the development of high technologies in many aspects, which has given rise to a series of changes, the industrial society and the mindset, theories, decision-making and management system formed by its production and behavior pattern are still taking the dominant position and reluctant to exit the historical stage. Against the backdrop of industrial society most countries go after the maximization of material interests in economy, stress absolute sovereignty over resources or even expansion in military affairs, thereby laying down the ideological and theoretical foundation for the domestic and foreign policy of these countries in that era. Even today in the more developed west high technologies are generally used as means for accomplishing political and military objectives or supporting measures to augment economic output value. The foreign influence of the science and technology in developing countries, due to their relatively backward economy and culture, play limited role and some cannot but copy the development mode of the west.

Nevertheless, a great many facts in modern international relations show that the continuously advancing high technologies and its industrialization are greatly changing past indirectness of the relationship between technologies and politics, economics, military and security, resulting in expanded scope and accelerated speed of international relation changes. High technologies promote the development of international relations with its role mainly shown in the following:

High technologies led by information technology and their industries have spread all over the world. International political and economic order and great powers' interests are beginning to restructure; supported by scientific and technological advance transportation and communications are becoming increasingly developed. Plus, economic interpenetration and frequent cultural exchanges cannot but turn countries or even the international relations into a system structure that cannot be separated and have strict arrangement and particular operation mechanisms; the difference and contrast in political and economic development of different countries are being increasingly manifested through overall national strength with high technologies as its core part.

Contest of overall national strength growing fierce is the prime root of the uncertainties in international relations. The further in-depth development of high technologies is bound to complicate the uncertainties.

After entering the 21st century, be it peace and development or the common security and interest assertion of various countries, none can alienate itself from the direct participation of high technologies. Quite obviously, only a multi-polarized world pattern with political purposes, guided by science and technology and based on economics is the essential feature of today's international relations. Though the international situation is constantly changing, science and technology, economics and politics are no doubt the starting point and end-result of observing and analyzing various international issues. In recent years, world economy is quickening pace in becoming more advanced and integrated. World economic structure is becoming increasingly inseparable from trade and the financial market. Resources, ecological treatment are frequently seen interacting and coordinating with international relations. The multi-win solutions to economic competitions, political differences and security crises are reached by using exchange and cooperation of high technologies so as to find good channels and achieve corresponding effects.

The coordinated advance of high technology development, and world pattern, its system are always exerting tangible and intangible influences. It is these influences that give rise to the transformation of international relations from the old order to the new order. For now, centering around industrial structure, regional cooperation, South-North coordination, ecological optimization, social environment quality and soft, hard national strength, international relations are locked in a new round of seesaw struggle of existence and development advantages in the political, economic, technological, cultural or even military area. Here, the new order of international relations mainly includes new world economic order, new global resource allocation system, new development concept and world consciousness. Though the developed and developing countries have different opinions on the mode and content of new world order, the threat and pressure that challenge the condition of human existence will eventually force various countries to gather around the same goal while science and technology are without doubt one of the cohesive forces in the process.

The article, written by Feng Jiangyuan and translated by People's Daily Online, is carried on the 7th page of People's Daily on October 14.

http://english.people.com.cn/200510/16/eng20051016_214602.html

China's economy to grow by 8.3 percent this year: World Bank

UPDATED: 13:59, April 27, 2005

China's economy is expected to grow by 8.3 percent this year, while its inflation rate will be 3.5 percent, well within the range set by the central government, the World Bank said Wednesday in a quarterly report.

According to its quarterly report on the Chinese economy, the bank said it expects further easing of domestic demand growth, notably investment, on the back of limited credit growth and sliding profits.

"Inflation is likely to remain within the government's target range, whereas China will retain its strong fiscal and external positions. We project a GDP (gross domestic product) growth of 8.3 percent and inflation of 3.5 percent."

Domestic demand is cooling down, but external demand keeps GDP growth high. Real fixed asset investment FAI growth was 17.2 percent year-on-year in the first quarter of 2005, which is down from 24.9 percent in the year 2004, although up from the 15.5 percent in the final quarter of last year, according to the report.

It said investments are shifting away from sectors previously considered as overheated such as steel and cement. Retail sales growth is gaining momentum, although consumption growth is still likely to lag GDP growth for the year.

"Tax revenues also suggest slowing in domestic demand, and trade data confirm this trend. At the same time, the rising trade surplus is boosting industrial production and kept GDP growth rate at 9.5 percent in the first quarter, the same as that in the fourth quarter of 2004."

Slower money growth indicates that external surpluses pose as of yet little risk for China's monetary policy. Money growth in the first few months of 2005 is compatible with the 15 percent growth target for the year, and the record balance of payment surpluses seem as of yet to pose little complications for monetary control, according to the report.

The macroeconomic outlook for 2005 remains favorable, said the bank. "Global growth is expected to slow down from its record 2004 level, but still remains robust, barring sharp adjustments in the dollar, global interest rates, and oil prices."

"Given the constellation of risks, prudent economic policies are appropriate. Domestically, risks are on the upside, particularly on investment. Externally, downside risks appear to dominate, largely weaker than expected world growth and complications stemming from the large trade surplus."

The bank said a rebound in investment in early 2005 raised concern among analysts, but the trend remains one of a slowdown, and the changing composition should give some comfort to policy makers that the policies introduced in 2004 are working.

Moreover, the number of new projects declined in January-February, with a 6.6 percent fall in new investment volume.

Source: Xinhua

http://english.peopledaily.com.cn/200504/27/eng20050427_182922.html

UPDATED: 12:23, March 05, 2005

China will gear down its high-octane economy to a level lower than the stunning 9.5 percent registered in 2004, as Premier Wen Jiabao announced Saturday that the government targets an "appropriate" 8-percent GDP (gross domestic product) growth rate this year.

It would be a "key job" for the government to keep the world's fastest-growing economy developing on a "fast and stable" track, Wen stressed in his government work report delivered at the opening of the annual session of the National People's Congress (NPC), China's parliament.

"Neither a big up nor down in the economy is conducive to economic growth, reform and opening-up drive and social stability."

The premier reiterated governments at all levels should engineer economic growth and social progress with a scientific outlook on development, shifting the government's development philosophy from growth-centered to people-centered.

"The interests of the broad masses should be put in the first place," Wen Jiabao said through nationwide TV live broadcasting.

Twenty-six out of China's 31 provinces, municipalities and autonomous regions have so far posted the abolishment of agro-tax, a policy Wen set forth at last NPC session that benefits farmers at the cost of the central government's fiscal revenues.

The NPC deputies burst into applause when the premier announced agro-tax will be exempted across the country by 2006, two years earlier than the original timetable.

Farmers' earnings now lag behind city residents not only in amount, but in growth rate -- being 7.7 percent for city dwellers and 6.8 percent for rural people last year.

"So what for a high GDP if the ordinary people's wallets are 'shrunken' and the environment is poor?" said Liang Tiecheng, a deputy from the economically less-advantaged Inner Mongolia, on the sidelines of the convention.

For urban residents, Wen vowed to create 9 million new jobs this year after the country saw its registered urban unemployment rate fall by an annualized one tenth of a percentage point to 4.2 percent by the end of last year, a minor but first decrease in nearly a decade.

The central government will step up support for building of a nationwide disease control and medical treatment system to cope with emergency events like the SARS outbreak that killed hundreds in the spring-summer of 2003.

Wen said in 2005 the government would typically set aside 3 billion yuan (362.3 million US dollars) to aid the technical upgrading work at state-owned coal mines. The premier called for local governments and enterprises to shovel more money into the field.

A vice provincial governor was suspended following a gas explosion at the Sunjiawan colliery near Fuxin, in northeast China's Liaoning Province, that claimed 214 lives last month -- the country's worst mining accident in decades.

TO AVERT A ROLLER-COASTER

China began 2004 amid serious worries that the economy was dangerously overheated, with easy credit fueling production of factory-gate goods and soaring investment in government infrastructure products.

Inflation rose at an alarming rate, hitting a peak of 5.3 percent last July and August.

Fixed asset investment, an indication of how much the government is spending on major infrastructure projects, hit ten-year highs in the January and March period, growing by 43 percent.

This prompted the central government to order energy-saving measures and tell local officials to cut spending on pointless prestige projects and unneeded factories, roads and other facilities.

A raft of market-based macro-control measures including the first bank interest rate hike in nearly a decade were taken before red-hot investment growth was effectively curbed and the consumer price index, a key barometer of inflation, slowed sharply to 1.9 percent last January from an average 3.9 percent in 2004.

Macro-control should be "consolidated and upgraded" as the outstanding problems in economic activities have yet to be "fundamentally solved", though they have been "somewhat alleviated", Wen told the 2,904 deputies present at the Great Hall of the People, the seat of China's NPC Standing Committee.

The premier reaffirmed the fiscal policy would swing from "proactive" to "prudent", resulting in a 19.8 billion yuan (2.4 billion dollars) reduction in fiscal deficit in 2005, dropping to 300 billion yuan (36.2 billion dollars).

Long-term treasury bonds to be issued will be 30 billion yuan (3.6 billion dollars) less than last year, continuing a dropping streak to stand at just 80 billion yuan (9.7 billion dollars) in 2005.

The country began issuing such bonds in 1998 in a bid to expand investment to stimulate the then slowing economic growth. But Wen said that the current investment scale was already big and private funds had started to flourish.

The parallel monetary policy would remain "prudent", the premier said. The word "prudent" is interpreted by many economists as being more adaptable to economic environment -- neither solely expansive nor contractive.

According to central bank sources earlier, new loans from banks in China should not exceed a combined 2.5 trillion yuan (301.9 billion dollars) this year.

Paired with strict approval for land use by enterprises, credit curbs would continue to a key measure to cool down the economy. Wen Jiabao noted on Saturday.

Noting that China would keep the yuan "basically stable" and maintain "basic balance" in international payments, Wen indicated that in 2005 China would not revalue the yuan, which is tightly regulated and trades only within a narrow range of around 8.28 yuan per US dollar.

Regulators, however, have been gradually lifting restrictions on foreign exchange dealings by individuals and companies on the back of booming economic and trade activities in the country.

Stepping out of the Great Hall, Xiao Zhuoji, a prestigious economist with Beijing University, said to the reporters, "The target for slower but still fast growth can definitely be achieved. " He predicts that an even higher 8.5-9 percent GDP increase could be materialized this year.

Xiao noted brisk consumer spending would be a key engine to boost the economy after total retail sales hit a record high of more than 5 trillion yuan (604 billion dollars) last year. Increasingly affluent Chinese are spending more than ever on tourism, food, clothing and entertainment.

http://english.peopledaily.com.cn/200503/05/eng20050305_175625.html

Chinese Economy: A perspective into 2005

UPDATED: 16:28, January 14, 2005

--- An interview with Xie Fuzhan, Deputy director with the Development and Research Center under the State Council

The Chinese economy is now still marked on the round of an uprising period and 2005 is going to witness another year of a relatively quick development.

Reporter: One question of which people are very much concerned is whether the Chinese economy can carry on, as did before, a relatively fast development in 2005 and what's your primary judgment?

Xie Fuzhan: Generally speaking, the Chinese economy is still marked on the round of an uprising period. It is going to witness another year of quicker growth. After over a year of effective macro-control the obvious contradictions in the economic operation have tended to be alleviated with unstable and unhealthy factors being put under control and fragile links being strengthened. All these have come to lay a relatively sound foundation for the economic development this year and also created a space for the employment of the macro-control economic policy.

Reporter: Whence does the motive force come from for the economic growth this year in your point of view? Is there still a sanguine expectation for agricultural production this year?

Xie: The motive force for economic growth this year can be dealt with from the following two aspects.

First is the demand in general. The Chinese economy at present is right on the track of a smooth development for industrialization and urbanization, a period for speedy upgrade of consumption structure. The consumption of the inhabitants is now right in the transition from a simple eating, clothing and spending as main consumption to that with housing as a major objective. This is a long tendency, which is also an internal driving force propping up the economic growth and will not be changed according to men's wills nor will it be altered by a short-term policy adjustment. Though the fixed-asset investment has been turned down but still sees an increase rate of over 20 percent, indicating an construction scale of RMB 20 trillion yuan which remain still a very strong pulling force forward. Besides, the world economy witnesses a trend of sustainable growth and so the external environment proves good for China's export and exploitation of foreign capital. The second is to take a look at the supply in general. The bottleneck restriction has been being alleviated. The shortage of power supply in some economy-vigorous-and-strong provinces, cities and municipalities is quite hopeful to get gradually released in the later half of the year, thereby realizing a further emancipation of the productive forces in these areas. The adjustment of investment and resource structure will be good for the alleviation of contradiction caused by the restriction of resources. And still more the transformation of the state-owned enterprises has been intensified while the non-public owned economy has been vitalized. This will also help constitute a supporting factor for a speedy economic growth.

Though the production increase in agriculture and the increase in farmers' income this year will be more difficult than that in last year yet the policy strength from the central government is being reinforced too. What is important now is to have a unanimous viewpoint and put all policies from the central administration into a down-to-earth implementation, so as to strengthen the support from the whole society for agriculture and bring about a harmonious development between the city and the countryside and between agriculture and non-agriculture.

The difficulty in economic operation is the very difficult point for macro-controls, and this is mainly focused on the employment of the tools and the master of forcibility for macro-controls.

Reporter: If we are going to make an assessment of catchword in economy for 2004 the elected one is beyond doubt the "macro-control". And how do you think it will be adjusted in 2005 with regard to its forcibleness and ways for the adjustment?

Xie: In view of the macro-control this year the central administration has already decided a doubly stable policy orientation. The financial policy in the macro-control policy orientation will be shifted from an active financial policy practiced ever since 1998 towards a smooth and stable one. Concretely speaking, both treasury bonds for construction and financial deficit are going to be reduced. The stressed point of financial policy will be changed from stimulating the internal needs for pulling the economic growth along to gradually strengthening the weak links, adjusting the economic structure and for supporting the system reform. Judging from the objective of the currency policy the macro-control policy has not only to support for a relatively speedy economic growth but also to prevent the currency from appreciation. Therefore, a reasonable scale of currency and credit supply has to be maintained with emphasis to be laid on the optimization of credit structure.

Reporter: What are the difficulties in the economic operation and the macro-control for this year?

Xie: The difficulty in economic operation is the very difficult point for macro-controls. And I'm of the opinion that the difficulty is mainly focused on the employment of the tools and the forcibility exercised for macro-controls.

In view of the emphasis for macro-controls it is at once necessary to prevent the comeback of fixed-asset investment and too many and too fast a downturn in the investment and therefore, a reasonable and timely strengthening and improvement of macro-control has to be effectuated. However, there still exit some difficulties in the selection and employment of the policy tools for the macro-controls. For instance, the interest rate and the exchange rate interact each other and the employment of price tool and the control of price level in general will be beneficial for one thing but detrimental to the other and so it is necessary to make a comprehensive balance and policy-making in a circumspect way.

I think the key of macro-control for this year lies in investment. Therefore, the following points must be well carried out: to strengthen the regulatory administration of the land; to optimize credit structure under the condition for maintaining a reasonable credit scale in order to bring about the adjustment of investment structure; to work out as quick as possible the detailed regulations to get along with investment system reform so as to regulate the behavior of investors and the government; efforts to be made as far as possible to make a correction of the variables in economy in order to eliminate and weaken the distortion of the market and enhance the investment efficiency.

The biggest uncertainty in the operation of Chinese economy is mainly the trend of world economy, trend in the changes oil prices and the stability of the US dollars.

Reporter: What are the factors that will affect most the prices this year?

Xie: The factors exerting influence on the prices this year see a duality of both advantages and disadvantages. However, to judge it on the whole it's possible to keep the consumption price index within a range of 4 percent. This year will see a little possible rise of grain price as against that of last year and so the foodstuff price will be maintained relatively stable. The factors that are most likely to affect the rise of prices are the following three: the price of means of production; the price for services which include prices for water, electricity and transportation and the third is the price of real estate. If the prices of the three aspects rise simultaneously or one of them rises drastically it is possible to bring up quickly the other consumption prices. This is a key point that the macro-control has to pay close attention to.

Reporter: apart from prices what are the most uncertain factors that affect the economic development in China this year?

Xie: I think the biggest uncertain factor in the operation of Chinese economy is mainly the trend of the world economy, the tendency and level in the change of oil prices and the stability of the US dollars. The three aspects are the factors that we are unable to control.

Last year witnessed the best economic situation in the world in the recent a few years. The economy told an all round recovery in the US, Japan and Europe, which served a positive influence on China's economy in foreign trade and the national economic situation as a whole.

This year will still see a good operation in world economy as a whole but the growth rate is possible to be somewhat slower than that of last year and the biggest uncertain factor remains still the US economy. At present, there exists a huge deficit in its trade and finance. The US dollar is undergoing a drastic devaluation, the big fluctuation of its exchange rate constituting a threat to the stability of the world economy. Next is the instability of the oil price. China sees a year-on-year increase in oil import, telling a very quick dependence on it and so we should not underestimate the influence of the oil price rise. Still more is that after the entry into the WTO trade friction and coalition is on the increase when the transition period is over and the risk in part of economic sectors opened to the outside world is likely to loom larger. All these are the newly cropped uncertain factors.

By People's Daily Online

http://english.peopledaily.com.cn/200501/14/eng20050114_170705.html

China's economy soars 9.5 percent in 2004

UPDATED: 13:13, January 25, 2005

China's gross domestic product totaled 13.65 trillion yuan (1.65 trillion US dollars) in 2004, a jump of 9.5 percent year on year, the National Bureau of Statistics (NBS) said Tuesday in Beijing.

The robust economic picture was posted against the backdrop of substantial government efforts to cool down the economy, especially some red-hot sectors such as steel, cement, aluminum and real estate.

Preliminary figures show that the added value of primary industry rose 6.3 percent to 2.07 trillion yuan (about 250 billion US dollars) last year, the NBS said in a press release distributed at the Information Office of the State Council.

That of secondary and tertiary industries rose 11.1 and 8.3 percent to 7.24 trillion yuan (874.4 billion dollars) and 4.34 trillion yuan (524.15 billion dollars), respectively, it added.

NBS director Li Deshui told the press that China had scored "tangible" outcome in cementing and improving macro-control and curbed "unhealthy and unstable" factors in its economic development.

The Chinese national economy maintained a stable and relatively-fast growth trend, awarding off a roller-coaster, he noted.

China recorded 6.28 trillion yuan (766 billion dollars) in its overall added industrial value last year, increasing an annualized 11.5 percent and remaining the biggest contributor to economic expansion.

Major industrial enterprises, or firms whose annual sales revenues exceeding 5 million yuan (609,000 dollars), registered a 16.7 percent rise in its added value in the past year, down slightly from the previous year.

Coal output went up 15 percent, while power output was up 14.9 percent. Aggregate product of pig iron, crude steel, rolled steel rose 24.1 percent, 32.2 percent and 23.5 percent, respectively. The automobile sector churned out 5.2 million units of motor vehicle.

According to Li, total profits for China's industrial sector stood at 1.13 trillion yuan (138.3 billion dollars ), up 38.1 percent.

Investment in fixed assets totaled 7.01 trillion yuan (about 854.5 billion dollars), up 25.8 percent year-on-year, or a drop of 1.9 percentage points from the previous year.

Consumer spending remained stable but showed invigorating signs in China last year, with the combined retail sales volume growing 13.3 percent year on year to 5.4 trillion yuan (652.17 billion dollars) in 2004. It climbed 10.2 percent after deducting price hikes, 1 percentage point higher on a yearly basis.

Urban and rural retail sales rose 14.7 and 10.7 percent, respectively.

Typically, per-capita net income of rural residents rose 6.8 percent last year to 2,936 yuan (355 dollars), the strongest growth in the past seven years since 1997.

Per-capita disposable income of urban residents reached 9,422 yuan (1140 dollars), a net rise of 7.7 percent.

By the end of 2004, the saving deposit of urban and rural population totaled more than 11.95 trillion yuan (approximately 1.44 trillion dollars), an increase of 1.59 trillion yuan (192.6 billion dollars) over the end of 2003.

Last year, the number of the newly employed reached 9.8 million among the urban residents, 800,000 more than the anticipated goal. As a result, the urban registered unemployment rate dropped to 4.2 percent at the end of 2004, down 0.1 percent from a year ago.

China's total grain output in 2004 reached 469.5 million tons, a hefty increase of 38.8 million tons or 9.0 percent over the previous year.

Both total grain production and average yield of cereals crops in 2004 were an all time high. Average per-hectare grain yield was 4,620 kilograms, up 6.6 percent.

Total cotton production reached 6.32 million tons, up 30 percent; oil-bearing seeds output was 30.57 million tons, up 8.8 percent; output of sugar-bearing crops was 95.28 million tons, down by 1.2 percent; total meat output was 72.60 million tons, up 4.7 percent; and the output of aquatic products amounted to 48.55 million tons, up 3.2 percent.

http://english.peopledaily.com.cn/200501/25/eng20050125_171847.html

UPDATED: 10:01, December 30, 2004

China's economic growth will top 9 percent this year, a figure that, while still robust, is more likely to be sustainable level than the overheated environment of the past few years, analysts say.

By implementing a set of lending and land use curbs, the Chinese leadership eased investor fears that the world's fastest growing economy was on the verge of spinning out of control as it did in the mid-1990s.

By the end of November, the annualized growth of broad measure of money supply M2 and renminbi-denominated loans plummeted to 14 and 13.5 percent, respectively, from nearly 30 percent early this year, signaling that industrial producers, especially in such overheated sectors as steel, cement and aluminum, obtained much less support than before.

The People's Bank of China, the country's central bank, raised interest rates by 0.27 percentage points at the end of October, the first increase in nearly a decade, to help curb inflation, which hit 5 percent for consecutive months, and to further reel in investment, though the investment-driven economy had already shown signs of easing.

In April, China's State Council decided to halt the examination and approval for land for purpose of non-agricultural use, an effort to stop the construction of unneeded factories and copy-cat projects.

At the same time, China said projects vital for economic expansion should still be given a helping hand, as demonstrated by a recent plan passed by a State Council meeting on the construction of port groups in the Pearl and Yangtze river deltas and Bohai Bay, China's three bustling economic centers.

Financial and policy support were also encouraged to benefit the "weak links" in the economy such as agriculture and some industries in economically less-advantaged western region.

The Chinese government helped increase farmers' incomes, which rose 11.4 percent in the first three quarters of the year.

Premier Wen Jiabao's government decided to phase out agricultural taxes, and Wen personally intervened to help a farmer get his back wages.

As James Morris, executive director of World Food Program (WFP) put it, China's achievements in alleviating rural poverty are a "great miracle" of the 20th century.

China shrugged off tremendous pressure from some developed countries, especially the United States, to revalue the Chinese currency, saying it need more time to ameliorate the weak financial system ahead of a free floating of the yuan.

For the coming year, challenges such as overinvestment and possible inflation remain, economists say. The Producer Price Index, a measure of cost of goods when they leave the factory, is now still high, adding to inflationary pressure.

The Ministry of Finance noted recently China's fiscal policy, along with monetary policies, would change from "proactive" to "prudent," which means treasury bonds that have for years supported the development of roads, power plants and other facilities will be on the decrease.

Yao Jingyuan, chief economist of the National Bureau of Statistics, has said China's economic growth target may be set at 8.6 percent in 2005, a more practical figure compared with this year's original aim of 7 percent.

Source: Xinhua

http://english.peopledaily.com.cn/200412/30/eng20041230_169188.html

China to establish "green GDP" index system

UPDATED: 12:19, June 26, 2004

The State Statistical Bureau (SSB)and the State Environmental Protection Administration (SEPA) are jointly working on the criteria for the so-called green GDP, which deducts the cost of environmental damage and resources consumption from the traditional gross domestic product.

According to an international seminar on "green GDP" calculation held in Beijing Friday by the SSB and SEPA, related departments will soon establish theoretical systems and basic frameworks to evaluate the overall environment and economy, set up indexes to calculate pollutant materials and environmental costs and spread the new index systems from experimental sites to other areas.

The growth of the Chinese economy is still of low efficiency and consumes huge resources, said SSB Director Li Deshui, noting the introduction of a "green GDP" index system has become an urgent and crucial task for sustainable development.

In the past 25 years, China has achieved an economic miracle with average GDP growth at above 8 percent every year. However, as GDP has become the main standard, or the only standard in some regions, to evaluate the government's performance, many local officials have turned a blind eye to development in other fields, including medical care, education, culture and environmental protection.

The traditional GDP index could not fully reflect the relationship between economic growth and the environment, the environment and people, said Niu Wenyuan, chief scientist on sustainable development strategy at the Chinese Academy of Sciences.

"If the current high-cost growth and serious pollution continues, China will face a heavily-polluted environment and a serious shortage of natural resources in the near future, which would not support its future development," said Pan Yue, vice-director of the SEPA.

"We must adopt a scientific approach to the current accounting system of GDP, a comprehensive indicator of the economy," said Zeng Qinghong, Chinese vice president, at a recent seminar on the subject.

Southwest China's Chongqing Municipality, the only trial city designated by the SSB in 2001 for developing the "green GDP" system, has studied data collected from 1,415 local enterprises and non-profit institutions. Based on the study, an initial feasible "green" GDP accounting approach has come into being.

"Traditionally an official who expands economic growth at huge environmental cost may well be promoted to a higher position, for he is evaluated mainly by the GDP growth," said Pan Yue. The "Green GDP" is a more rational norm to evaluate local officials' performances and, in turn, China's overall economic achievements.

Source: Xinhua

http://english.peopledaily.com.cn/200406/26/eng20040626_147601.html

China promotes recycling economy

www.chinaview.cn 2004-11-01 07:01:40

BEIJING, Oct. 31 (Xinhuanet) -- China will take more measures to protect the country's deteriorating environment to contribute to the sustainable development of both China and the world, Chinese Vice Premier Zeng Peiyan said here Sunday.

"China's economic and social development is facing increasingly heavy pressure from environment and nature resources, marked by pollution and environmental degradation" Zeng said.

He pledged that the country will strive to build an environment-friendly society by further strengthening its legal framework, relying on scientific advancement and strongly promoting recycling economy.

The vice premier outlined four major tasks in combating environment degradation for the country, including adjusting economic structures, curbing pollution in rivers and lakes, shutting down heavily-polluted enterprises and enhancing international cooperation.

Zeng made the remarks at the closing ceremony of the annual meeting of the China Council for International Cooperation on the Environment and Development, the government's international advisory body.

The council consists of 50 senior government officials and experts from China and other countries and representatives of international organizations, including the United Nations Environment Program.

During the three-day meeting, members of the council focused their discussions on sustainable agricultural and rural development and drafted a report of recommendations to the Chinese government.

The council said in its report that it supports China's policy of seeking a new, scientific and sustainable approach to development by putting people first. The report recommended that China value the quality and efficiency of its economic growth.

The report highlighted six general recommendations, including implementing a broader vision linking ecological and food security,developing new ecological and economic-based national strategies to integrate water management and water quality and modernizing the management of China's protected areas.

Zeng thanked the council for the recommendations and promised that the government will take the recommendations seriously, as ithas in the past.

The vice premier said China will further enhance cooperation with the international community on environmental protection by introducing advanced technology and management methods.

Meanwhile, the country will as always actively participate in international affairs on environment and seriously implement environment-related international conventions it had acceded to, he said.

Zeng called on developed countries to take on more responsibilities for environmental protection, increase financial aid to developing countries and promote the popularization of environment-friendly technologies and management experience.

He also urged developed countries to further open their marketsto developing countries to ease the resource and environmental pressure faced by developing countries.

The next annual conference will be held in November 2005 and focus on sustainable development in the urban areas, according to the council's secretariat. Enditem

http://news.xinhuanet.com/english/2004-11/01/content_2162346.htm

On 8 issues concerning China's macro-control

UPDATED: 10:38, November 06, 2004

Is the adjustment to the economy necessary? Is the time for the macro-control right? How are things going? In a response to the concerns and doubts overshadowing the macro-control policy, Mr. Ma Kai, Director of the National Development and Reform Commission, illustrated his perspectives about the following eight issues in the macro-control policy.

Is it necessary?

There is an opinion that the macro-control is no more than a backlash of the government to the market economy. They argue that the overheating investment in some sectors and the soaring credit, if there were, were the evidence and results of the economic growth and would be adjusted by the market.

Theoretically, Ma stressed, it is a natural task to improve and consolidate the macro-control to develop the socialist market economy. This is stated very clearly in the document of CPC's 14th National Congress defines the socialist market economy as an economy allowing the market to play a basic role in allocating the resources under the government's macro-control.

In practice, some unstable and unhealthy factors in the new cycle of economic growth have made the macro-control a pressing task. The plunging grain supply and the soaring fixed asset investment have been identified as the most prominent. Take the iron and steel as an example. Investment in this sector more than doubled in the first quarter of the year. And the structure has not been improved. Projects with heavy resources consumption and pollution and low tech level were launched.

Historical experience has proven when a sharp decline of grain production coincides with inflating investment, there is bumps in the economy. Investment spree normally leads to excessive credit, which in turn pushes the investment further up. It also causes tight supply of energy which in turn boosts prices of basic products.

In a word, Ma warned, since last year the national economy has been exposed to the unhealthy and unstable factors which were spreading. As the central government pointed out, if these looming dangers had been let untouched, they would have created "unimaginable" consequences, including the troubles of resources and environment, the irrational economic structure, more insolvent businesses, rising unemployment and more bad loans in banks. It would take longer time to recover to recover at bigger costs if violent vibrations occurred in the economy.

Neither too last nor too early

Some complained that the government was too slow to take actions. It is not the truth, Ma said.

The central government spotted out the looming dangers of blind investment as early as the first quarter of last year when the country was still fighting against the SARS epidemic. An array of measures have been adopted since then to control the credit and land supply to confine the problems from plaguing the whole economy.

It is due to the prompt decisions of the central government that the macro-control has taken effect soon at relatively low costs.

Administrative or economic?

There's nothing new. Administrative measures still prevail. Some are disappointed. Ma refuted this saying by highlighting the various measures which have been adopted so far.

The central bank has used monetary polices to rein in the growth of money supply. It issued bank notes, raised the threshold of real estate loans, increased bank deposit reserves, consolidated the synergy of credit policy and industrial policy. The latest move is its benchmark interest rate hike and broader range in which RMB loans and deposits float.

Market access has been made more difficult for some sectors believed to be expanding at a low level. More long-term state treasure bonds have gone to agriculture and public affairs. Prices have played an important role in boosting the grain prices and easing the power crunch.

Adjustments have been made on materials reserves and imports and exports. And laws are implemented to crack down land use abuse.

A real solution

The central government has repeatedly stressed that a fundamental solution would be given to solve the existing problems and facilitate the long term development.

Given this, the central government has launched a series of reforms on systems of various fields ranging from the grain circulation, investment regime, tax mechanism to the financial sector and administrative approving process.

In addition, positive progress has been made on establishing and improving the management of state-owned assets and pricing system.

The deepening reform, Ma stressed, will lay a good foundation for a lasting development.

Neither a sudden halt nor a one-cut-for-all approach

The macro-control is focused on the improvement of the investment structure. To this end, excessive investment in some sectors is put under stringent control on one hand while spur is given to other sectors.

Land is still accessible to projects of energy, transportation, water conservancy, major infrastructure in cities, health care and education. The agriculture has absorbed more investment. Fund input into education and health care increased by 24.8 percent and 27.4 percent for the first 3 quarters of this year. Investment in energy also jumped significantly.

Even for the iron and steel sector, tech-intensive environmental friendly products with promising market get much support. Baosteel, for example, is working on new projects of quality iron and steel.

The development of the mid-west

Ma dismissed the concern that the macro-control would hinder the take-off of the country's mid-west.

The frenzy of development zones also drained the arable land away in the mid-west. Small cement and iron plants swallowed energy and gave off pollution there. The region also struggled in the crunch of the supply of coal, power, oil and transportation.

The fact is that the macro-control has boosted rather than hindered the fast and healthy growth of the mid-western region. Some areas in this region even grew faster than their eastern counterparts.

The central government has offered more support to this region. For example, more than 88 billion yuan will be spent on 10 major projects in the mid-west.

In particular businesses in eastern China is switching their attention to the mid-west. For the first 9 months of the year, the ratio of the investment from the country's east in the total fixed asset investment was down while that from the mid-west was up.

The non-public economy

Ma reiterated the commitment to the non-public economy as a driving force of the development of the productivity of the country and an integral part of the socialist market economy.

It is the law, instead of the ownership, that decides the fate of an enterprise. State-owned enterprises found breaches of laws and regulations were also punished.

The macro-control has improved the environment for development which in turn facilitate the growth of the non-public sector. Non-government investment spiraled up 59.4 percent for the first 9 months of this year over the same period of last year. And it is also gaining more ground in the total investment of the society.

Macro-control vs. economic growth

Slowing down the economy is not the purpose of the macro-control policy, stressed Ma. On the contrary, it aims to secure the fast and sound development of the national economy. And practice has proved that the macro-control has worked well in these aspects.

All indicators imply problems in the economy are easing. Grain production upturned. Fixed asset investment slowed down. Growth of money and credit moderated. And land market was better regulated.

The national economy is still gathering momentum and generating good results. GDP grew 9.5 percent for the first 3 quarters. The fiscal revenue and industrial profits increased by 26.2 percent and 39.8 percent respectively. Foreign trade experienced fast development. Farmers enjoyed two-digital rise for their income. The labor market expanded. And the market was stable and brisk.

In his conclusion, Ma warned against any slack of the macro-control. He urged to ward off reoccurrence of the problems.

By People's Daily Online

http://english.peopledaily.com.cn/200411/06/eng20041106_162987.html

China's macro-control policy good for world: official

UPDATED: 16:46, October 31, 2004

The policy of economic macro control introduced by the Chinese government in the latter half of last year is "good for the world, especially developing countries," Tang Min, chief economist of Asian Development Bank (ADB) Resident Mission in China, said Saturday.

Tang said that economists were initially worried about the possible negative influence that might be exerted by China's macro-economic control over the regional economy, but judging from economic performance in the first three quarters of the year, "there have been almost no such negative elements."

The Chinese economy showed a growth of 9.5 percent from January to September this year, coupled with a welcome drop in the growth of certain overheated sectors.

Tang said that foreign trade was an important signal of China's adaptation into the world. China has kept a strong momentum in foreign trade, with the country's trade surplus decreasing as a result of increased imports. The country has made a positive contribution to the world's economy, he said.

China is now the world's third largest import market or the largest import market in Asia.

"Foreign investment has also increased, which shows that China's economy has provided plenty of opportunities to foreign investors, who haven't lost their confidence in the Chinese economy because of the government's macro-control policy. Foreign investors are more concerned with medium- and long-term development. Major fluctuations in the Chinese economy will be bad for foreign investors," said the ADB chief economist in China.

In the past several months, China issued a series of policies to encourage domestic enterprises to invest overseas. Tang held that it would be a "win-win" deal for developing countries, because they need funds and more employment opportunities, and China has been struggling to find new outlets for its capital, technologies and products.

As China has loosened some of its restrictions on overseas investment, more Chinese companies make such investments, contributing to the world economy.

Since the latter half of last year, the Chinese government has adopted a range of measures including limiting money supply, tightening land administration and limiting the scale of credits and loans.

Tang said that judging from present performance, China has kept a normal economic development while at the same time restricting the unhealthy part of the economy.

He said China should continue its macro control to maintain the healthy growth of Chinese economy.

Though prices have continued to rise, but "they might come down in the next two months," he said. But in the medium and long term, China will inevitably face the pressures of inflation from rising oil and energy prices and increased labor costs, he said.

Backgrounder: macro-economic controls in China

China's central government has initiated contractive macro-economic controls five times since the reform and opening-up drive was launched in 1978, each time in an effort to push the economy toward healthy growth.

China entered its fifth period of economic macro-control in the second half of 2003.

The Chinese economy expanded 9.1 percent in 2003, seeing runaway investment in such sectors as steel, cement, aluminum and real estate.

Correspondingly, the government took a host of precautious measures, including restricting banks' lending capacities, tightening land use and reining in investment. Analysts agree that these policies have achieved initial success.

The first four periods of Chinese macro-control -- 1979 to 1981, 1985 to 1986, 1989 to 1990 and the second half of 1993 to 1996 -- aimed to cool down an apparently overheated economy, which each time was growing at a rate of more than 11 percent.

The first economic overheating was reflected by soaring investment and large fiscal deficits caused by moves to spur consumption.

The second, third and fourth were all aftermaths of explosive investment and consumer demand, leading to overall shortfalls of goods. The Chinese government had to harness severe inflation during those periods, especially in 1994 when the consumer price index hit a high of 21.7 percent.

http://english.peopledaily.com.cn/200410/31/eng20041031_162239.html

China-ASEAN FTA to help bring about Asia's economic integration

UPDATED: 16:54, October 31, 2004

Singapore welcomes the establishment of China-ASEAN Free Trade Area (FTA), believing that it will help enhance economic cooperation and integration between ASEAN and China as well as Asia's economic integration, Singapore's Minister for Trade and Industry Lim Hng Kiang told Xinhua lately in an exclusive interview.

"The next big story for the world in the coming 10 years will really be the economic integration of Asia, and China-ASEAN Free Trade Area is a very important vehicle to bring about this economic integration," Lim said, adding that such economic integration means "something very special" to Singapore because it will give Singapore a big economic base to grow.

As planned, China and ASEAN will create the world's largest FTA of nearly 2 billion people with a combined gross domestic product (GDP) of more than 2 trillion US dollars by 2010.

Lim expressed confidence that the target set by China and the Association of Southeast Asian Nations (ASEAN) to increase their annual trade to 100 billion US dollars by 2005 is within reach.

"Trade has been growing very rapidly between ASEAN and China. I think that ASEAN-China trade amounted to 79 billion US dollars last year, and the 100 billion US dollars target is quite possible this year," Lim said.

Describing the economic relationships between the two countries as "very good," Lim said that China is now Singapore's fifth largest trade partner while Singapore China's seventh largest investor.

The trade volume between the two countries stood at nearly 20 billion US dollars last year and already reached about 22 billion US dollars in the first nine months of this year, he said, adding that Singapore's cumulative contractual foreign direct investment (FDI) in China last year was 43.5 billion US dollars, and the island state now has more than 12,000 projects in China.

Lim believed that there are great potential and opportunities for closer trade and investment relationships between China and ASEAN, and between China and Singapore.

China is growing at very rapidly and "this offers a lot of opportunities for ASEAN countries, including Singapore," he added.

The minister proposed that Singapore and China further strengthen their bilateral cooperation, especially in the field of trade, services and investment.

He noted that Singapore will encourage more companies to invest in China, and at the same time, it will also facilitate Chinese companies setting up operations here and penetrating into other ASEAN markets.

"As China develops and grows, as Chinese companies become bigger and stronger, we'd like to see them using Singapore as a base to trade and operate in the rest of ASEAN," he said.

Lim also hoped that talks on bilateral free trade agreement between Singapore and China should start as soon as possible.

"Singapore welcomes a free trade pact with China, both on the bilateral basis as well as on the regional basis as part of ASEAN," he said.

Lim will lead a 120-member delegation to attend the first China-ASEAN Trade Fair, which is to be held in Nanning, capital of southwest China's Guangxi early next month.

http://english.peopledaily.com.cn/200410/31/eng20041031_162255.html

Chinese economy takes on four fine tendencies after macro-control

UPDATED: 08:08, October 28, 2004

After the implementation of the macro-control policy there come to appear four fine tendencies in the deep strata in Chinese economy, said Qiu Xiaohua, Deputy director of the State Statistic Bureau.

First and foremost is that the industrial structure has taken on a tendency for improvement with the insufficient development of the primary and tertiary industries and too fast a development of the secondary industry being improved.

The second is that the relationship of investment and consumption is heading towards an improvement. The increase of investment is on the decline while the consumption is getting quicker with an obvious enhancement contributed by consumption to the growth of economy. The first half-year saw a growth of 9.7 percent in economy and a 4 percent rise contributed by consumption to the economic growth.

The third is that there is an improvement in the balance of imports and exports. Though there is still an unfavorable balance of USD 490 million in the period from January to July yet the whole year will see a balance at large with a little in the surplus.

The fourth is that there sees an improvement in the unbalanced development between cities and rural areas. This is expressed in an integrated way a turn for the better in rural consumption and in the increase of farmers' income.

The macro-control and adjustment this time is a preventive and positive one, said Qiu Xiaohua and is mainly for solving the problems in the following two aspects. The first is the investment problem and the second the weak-link in agriculture. It is a mild and structural adjustment and control. In the meantime attention has been paid to solving system and mechanism problems in economic life by adopting a series of measures for the adjustment and control.

With regard to the problems in economy at present, they are mainly expressed in the following three aspects as Qiu Xiaohua holds. First of all, it is the transportation and transmission of coal, electricity and oil and especially there is no full solution of the contradiction in the tightened power-supply. Next is that the problem of partially enlarged investment hasn't been solved and the third is the emergence of some new problems. There is a further revelation of structural contradiction in bank credits and loans. And by the way, with the gradual implementation of the macro-control the unhealthy reflection of excessive investment, blind construction and the repetition at a low level began to come to a head. This is mainly expressed in payment arrears in among enterprises and the stacked-up of products.

Qiu Xiaohua is of opinion that the macro-control policy to be taken next centers in the following six aspects. That is to stabilize the policy by observing the situation calmly and composedly; to consolidate the achievement in prevention from relapse; to treat things differentially by regulating the structure; to deepen the reform by stepping up the governance by law; to make overall plans by taking all things into consideration so as to realize a long-and-short-term combination and finally to form a concerted effort by unifying all viewpoints.

By People's Daily Online

http://english.peopledaily.com.cn/200410/28/eng20041028_161862.html

China's efforts to rein economy begin to pay off

www.chinaview.cn 2004-10-23 07:33:25

BEIJING, Oct. 22 (Xinhuanet) -- After one year's macro control, China's economic boom has showed modest slowdown with the growth rate being 9.5 percent in first three quarters.

"The government's efforts to cool the economy has begun to pay off," said Xie Fuzhan, deputy director of the Development and Research Center of the State Council, in an interview with Xinhua Friday.

China has brought its economy from breakneck growth to stable development, said the expert of macroeconomics.

Preliminary figures released by the National Bureau of Statistics (NBS) show that China's GDP (gross domestic product) growth rate reached 9.5 percent in the first three quarters, a fall of 0.3 percentage points compared with the first quarter.

The increase of investment in the fixed assets from January to September also reported a drop of 15.3 percentage points and 0.9 percentage points from the first half year and first quarter respectively, said Zheng Jingping, spokesperson with the NBS, at Friday's press conference.

The figures were encouraging and freed people of worries about hard landing, said Min Tang, chief economist of ADB (Asian Development Bank) Resident Mission in China.

Overheated industries such as steel, electrolytic aluminum, cement and real estate have been reined under the macro-control policies, while foreign trade maintained good momentum and sound increase, said Tang.

China's imports and exports have an impact on the economic development of its neighbors and the world. If China's foreign trade experienced big ups and downs, the world economy would be affected.

"As China has made a preliminary success with its macro-controlpolicy, its neighbors and those who have close economic ties with the country could feel at ease now," said Tang.

Experts are optimistic about China's grain output this year. Statistics with the NBS show that following the 4.8 percent growthof summer grain, the output of early rice reached 32.1 billion kilograms, up 8.8 percent. Good harvest of autumn crops is in sight, said Zheng.

Xie predicted China's total grain output this year would exceed455 million tons, the goal set by the central government at the beginning of the year.

In the first three quarters, the average income of farmers per capita also rose to 2,110 yuan (254 US dollars), a year-on-year increase of 11.4 percent.

The macro-control policy, which gave strong support to grain production, should bring agriculture back on track, Xie said.

China took the macro control policy late last year when the economy became partly overheated. The problem worsened at the beginning of this year. In the first two months, fixed asset investment increased 53 percent from a year earlier to a ten-year high.

Excessively rapid increase in investment resulted in big rise in loans, higher prices of capital goods, heavy pressure of inflation and tight supply of coal, power, oil and transportation.

Therefore, the central government tightened control over loans and land provision as well as project certification in order to cool the economy.

A survey released by the NBS earlier this week showed 70 percent of the economists were satisfied with the present economicsituation. They predicted fixed assets investment would drop 27 percent for the whole year and 24 percent next year.

The economists predicted China's economic growth would slow down next year, but the GDP growth rate would remain higher than eight percent.

However, China's economy still has problems in many aspects such as the investment mechanism, said Zheng.

The slowing down economy might rebound if the macro control policy did not continue, said Xie.

He suggested the government should be vigilant against unstableand unsound factors, and make timely adjustments in the process. Enditem

http://news.xinhuanet.com/english/2004-10/23/content_2128648.htm

UPDATED: 17:02, October 14, 2004

China 's rapid economic growth over the past years has been eye catching, so much so that reports, analyses and predictions are rife about its development momentum, implications and future directions. A most recent example is an article in the UK-based renowned magazine The Economist.

In the "The Dragon and the Eagle", carried in the publication's September issue, its economic editor Pam Woodall made a detailed comparison between growth in China and in the United States. Woodall asserted that if China continues with its reforms, it will enjoy faster growth than America has ever achieved. "Within a decade it will probably be the world's largest exporter and importer, and one day it may overtake America as the world's largest economy."

The world economy has expanded by nearly 5% over the past year, the fastest we have ever seen in two decades. The article lists two factors as major contributors to the growth: one is America's exceptionally loose monetary policy, which has encouraged relentless consumer spending, the other is an unprecedented investment boom in China.

Woodall highlighted China's catching-up efforts, stressing that "only a few years ago, the term 'the world economy' was used as shorthand for the economies of the developed world; China would at best rate a brief mention. But now it is too big to ignore."

China's GDP already accounts for 13% of world output, second only to America's. By the end of this year, the country will probably be the world's third bi