Macro economic measures begin to pay off
(Xinhua)
Updated: 2004-06-04 11:35

Premier Wen Jiabao said China's bid to improve macro-economic regulation, which focuses on curbing excessive growth in fixed-asset investment, has begun to produce tangible results.

Premier Wen Jiabao delivers a report to about 1,100 members of the Chinese Academy of Sciences and Chinese Academy of Engineering, in Beijng June 3. [Xinhua]

In a report on the situation of the economy delivered to about 1,100 members of the Chinese Academy of Sciences and Chinese Academy of Engineering, the premier said the country's economic situation is generally good.

He explained that the economy is growing fast, its economic returns continue to improve, the rural situation is comparatively good, and industrial growth remains relatively fast while the growth momentum of foreign trade is strong.

The income of the country's residents is growing at a relatively fast pace, and domestic consumption is growing in a stable but accelerating way, the premier said.

Facts have shown the macro-economic measures adopted by the central authorities to regulate the economy are timely, correct, and effective, said the premier.

"So long as the measures and policies are truly implemented, the economy can surely grow in a stable and relatively faster pace," he said.

China has moved to prevent its economy from overheating during the past year, using such means as tightening money supplies and bank loans to overheating sectors, such as steel and cement, and real estate.

Blind investment in those sectors also triggered shortage of energy supply and related raw materials.

Wen said China would strive to maintain its economic growth in a sustainable, coordinated, fast and healthy way through macro-economic regulation and scientific and technological progress.

GDP growth to top 9% in 1st half

A research report predicts China's economy in the second quarter would basically keep in pace with that in the first one and the GDP growth for the first half of year would top 9 percent, People's Daily reported on Wednesday.

The Report on China's Foreign Trade, issued by the Chinese Academy of International Trade and Economic Cooperation under Ministry of Commerce on June 2, says a stable development is achievable through successful macro-control. This means consistency and stability of macro-economic policies has to be secured on one hand and proper adjustments have to be made on policy implementation in a appropriate way and time.

In fact, the report has based its judgment on the following factors.

First, the national economy is in the rising period of a new round of growth. The fast economic development in 2003 has laid a good foundation for this year. The 3rd and 4th quarter of 2003 witnessed a growth of 9.6 percent and 9.7 percent. Standing at 9.7 percent for the 1st quarter of this year, the speed showed no slowdown.

Second, much vigor has been seen in subjects of micro-economy. Their confidence has been buoyed up by remarkable improvement in profits making among businesses in 2003. So has Consumers' confidence index. Consumption of housing, autos, communication and tourism will continue to heat up.

Third, macro-economic policies will maintain consistency and stability. The policy of boosting domestic demands, proactive fiscal policy and steady monetary policy will all be adhered to in 2004. Flexible micro-adjustment to be adopted will solve prominent problems in the economy.

Fourthly, possibility of a better international economic environment is high. Uncertainties as there are, the world economic environment is generally improving. Major international organizations all geared up their expectation on world economic and trade growth for 2004 on the basis of 2003. This favors China's export.

However, the report reminds us of some problems in China's economy. The bottleneck of energy supply, such as coal, power and oil, as well as transportation, plus price hikes of basic energy and raw materials, will likely further hinder investment and export expansion.

The central government's efforts on reigning in overheating investment in some sectors through tightened bank loan and land use will be paid off and have the effect felt. As a result, enterprises will face more difficult financing environment and land supply. In addition, it is no easy challenge to score a fast-speed export growth on the base of that in 2003 which was already very high.

For a conclusion, the report forecasts a basically same speed of growth for Q2 as that in Q1 in 2004. For the 2nd half of the year, the report expects it would be a little bit slower than that of the 1st half which is believed to exceed 9 percent. But generally China's economy will remain in a fast lane for the whole year, the report declares.