Economic macro-control effective in 7 aspects
(peopledaily.com.cn)
Updated: 2004-06-24 14:10

It was learned from the press conference held by the Information Office of the State Council in June 23 that the macro-control measures carried out by the central government have been evidently effective. The unstable and unsound factors in economic operation have been controlled; national economy keeps a rapid growth and the economic performance improved steadily.

The effective implementation of macro-control measure has been effective in seven aspects, said Cao Yushu, spokesmen of the State Development and Reform Commission.

First the trend of excessive investment growth has been controlled. From January to May urban investment in fixed assents grew by 34.8 percent year-on-year, 8 percentages less than the growth in the first four months. Investment growth in iron and steel, non-ferrous metal and cement industries fell by 22.5, 9.7 and 23.7 percentages respectively compared with that of the first four months. Investment in real estate development fell by 2.6 percentages.

Second, money supply and credit growth slowed considerably. By the end of May M2 and M1 balance growth fell by 2.68 and 0.21 percentages year-on-year and by 1.63 and 1.41 percentages month-on-month respectively.

Third, the price rise of basic products is under control. In May grain prices fell 0.5 percent month-on-month. Prices of production means in the circulation sectors fell 1.4 percent compared with those in the previous month.

Fourth, agricultural production situation showed a favorable turn and an increase of summer grain crops has been set.

Fifth, production growth speeds in some overheating industries slowed considerably. In May industrial added value growth in industries of scale-above fell by 1.6 percentages. Production growth in overheating industries such as iron and steel industry slowed considerably.

Sixth, consumption market is stable and showing a trend of prosperity. In May total retail sales grew considerably by 17.8 percent year-on-year.

Seventh, foreign trade keeps a rapid growth. In May total volume of foreign trade was $87.63 billion increasing by 34.1 percent year-on-year. It was the first trade surplus month this year.

Although macro-control by the central government has been very effective, there are still five acute inconsistencies and problems in the economy. Firstly, investment growth is still very high and the problem of unreasonable investment structure is still acute. Second, capital construction loans continue to grow excessively and the problem of unreasonable loan structure is still acute. Third, the supply-demand relationship of coal, electricity, oil and transportation is still very strained and the electricity situation during the summer consumption peak is severe. Fourth, the pressure of price hike is still high. Fifth, the imbalance of grain supply and demand and that of the variety structure are still very acute. Grain reserves decrease at a rapid speed.

According to Cao, the macro-control in China is still in a crucial stage and the achievements are still preliminary. We should, on the basis of consolidating what has been achieved and according to the principle of acting resolutely, forcefully, timely and appropriately with differentiated treatment and attention to the actual effect, continue to implement the macro-control policies and measures adopted by the central government; reinforce our efforts to promote structural adjustment; boost the various reforms and change the economic growth mode, in order to truly switch the national economy onto the sustained, coordinated and sound development track.

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