Home » Opinion » Chinese Views
Lower GDP growth more desirable
By Ma Shukun |
July 23, 2010, Friday
|
Print Edition
Print Edition
FROM a quick rebound from the global crisis to a moderate slowdown to avoid the risk of overheating, China's economy is heading down the path of balanced development.
Unlike the restrictive plan to only fuel growth in 2009 in response to the global economic turmoil, the Chinese government has more on its agenda this year, including maintaining stable and reasonably fast economic growth, accelerating economic restructuring and managing inflation expectations.
Debates escalated after the growth of China's GDP in the first quarter quickened to an eye-popping 11.9 percent, which ignited growing concerns about an overheated economy.
At the beginning of 2010, Premier Wen Jiabao warned that this year would be "the most complicated" in terms of economy.
Months later, Wen noted that "policy makers face increasing dilemmas as the effects of the global financial crisis become more severe than expected and worldwide recovery increasingly zigzags."
Wang Jun, a researcher of the China Center For International Economic Exchanges, said more dilemmas are complicating policy making, including contradictions between growth driven by government spending and economic restructuring; between curbs on property markets and economic growth; between withdrawal of stimulus packages and risks of double dipping; between adjustment of exchange rate policies and economic restructuring.
Cheng Enfu, chairman of the World Association of Political Economy and senior professor of the Chinese Academy of Social Sciences, a government think tank, blamed excessive economic growth for most of the dilemmas and problems facing China.
"To pursue high GDP growth, local governments would do everything, regardless of the consequences they could cause, including encouraging exports and the continuing production of polluting and energy-intensive products, and excessive exploitation of natural resources," he said.
The government cautiously moved to resolve these problems by hammering out a series of polices in the first half of 2010, including the raising of reserve requirement ratios three times; plans for regional development; prolonged subsidies for auto purchases; the increase of the minimum wage; cancelation of export rebates on some energy-consuming and high-polluting products; slowing of property costs; easing of restrictions for private investment in certain industries; and curbs on loans to polluting and energy-intensive industries.
Slower pace
Following the many measures adopted, the country's GDP grew 10.3 percent year on year in the second quarter of this year, easing from the 11.9 percent in the first quarter and 10.7 percent in the fourth quarter of last year.
Also, the inflation rate cooled to 2.9 percent in June, down from 3.1 percent in May. In June, property prices slid 0.1 percent from May.
Economists welcomed this moderation, mainly attributed to controls on lending and tightening of the red-hot property market, calling the government's GDP growth pace both reasonable and desirable.
Wen Jiabao said the slowdown was "primarily a result of active regulation and control" and said, "China's economy, in general, is in line with the government's macro-economic regulation and control." The theme for the regulation and control in the second half of this year was to "maintain the continuity and stability of policy," Wen added.
Cheng Enfu said economic indicators in the second quarter showed that China's economy had returned to the normal territory, steered by the government's economic policies.
The priority in the coming months should be to step up economic restructuring, instead of focusing on the growth rate.
"An annual growth rate of 8 percent to 9 percent should be perfect for economic restructuring, while ensuring improvement in people's standard of living," he suggested.
The government has pledged to pursue the adjustment of the development mode after the global financial crisis challenged the country's rapid development, fueled by massive investment and exports.
The target is set clearly: to create a more consumption-oriented economy, rather than one fueled by high investment and exports; to increase the weight of agriculture, manufacturing and services in the nation's economic growth, while decreasing the influence of industrial production; and to achieve growth led by technology and improvements in management, rather than through high-levels of energy consumption.
Cheng Enfu argued that more reforms to the current economic mechanism were pressing and the government should take into account more factors in assessing the economy, beyond GDP, employment and inflation.
He suggested the government step up reform of its foreign economic development mode, which had been relying on resources, imports, cheap labor and land, and favorable policies for foreign investment.
Indeed, in the second half of this year, the slowing economy and rising domestic and international uncertainties require more cautious and delicate handling of macro controls from the government to get through the difficulties.
(The author is a Xinhua writer.)
Unlike the restrictive plan to only fuel growth in 2009 in response to the global economic turmoil, the Chinese government has more on its agenda this year, including maintaining stable and reasonably fast economic growth, accelerating economic restructuring and managing inflation expectations.
Debates escalated after the growth of China's GDP in the first quarter quickened to an eye-popping 11.9 percent, which ignited growing concerns about an overheated economy.
At the beginning of 2010, Premier Wen Jiabao warned that this year would be "the most complicated" in terms of economy.
Months later, Wen noted that "policy makers face increasing dilemmas as the effects of the global financial crisis become more severe than expected and worldwide recovery increasingly zigzags."
Wang Jun, a researcher of the China Center For International Economic Exchanges, said more dilemmas are complicating policy making, including contradictions between growth driven by government spending and economic restructuring; between curbs on property markets and economic growth; between withdrawal of stimulus packages and risks of double dipping; between adjustment of exchange rate policies and economic restructuring.
Cheng Enfu, chairman of the World Association of Political Economy and senior professor of the Chinese Academy of Social Sciences, a government think tank, blamed excessive economic growth for most of the dilemmas and problems facing China.
"To pursue high GDP growth, local governments would do everything, regardless of the consequences they could cause, including encouraging exports and the continuing production of polluting and energy-intensive products, and excessive exploitation of natural resources," he said.
The government cautiously moved to resolve these problems by hammering out a series of polices in the first half of 2010, including the raising of reserve requirement ratios three times; plans for regional development; prolonged subsidies for auto purchases; the increase of the minimum wage; cancelation of export rebates on some energy-consuming and high-polluting products; slowing of property costs; easing of restrictions for private investment in certain industries; and curbs on loans to polluting and energy-intensive industries.
Slower pace
Following the many measures adopted, the country's GDP grew 10.3 percent year on year in the second quarter of this year, easing from the 11.9 percent in the first quarter and 10.7 percent in the fourth quarter of last year.
Also, the inflation rate cooled to 2.9 percent in June, down from 3.1 percent in May. In June, property prices slid 0.1 percent from May.
Economists welcomed this moderation, mainly attributed to controls on lending and tightening of the red-hot property market, calling the government's GDP growth pace both reasonable and desirable.
Wen Jiabao said the slowdown was "primarily a result of active regulation and control" and said, "China's economy, in general, is in line with the government's macro-economic regulation and control." The theme for the regulation and control in the second half of this year was to "maintain the continuity and stability of policy," Wen added.
Cheng Enfu said economic indicators in the second quarter showed that China's economy had returned to the normal territory, steered by the government's economic policies.
The priority in the coming months should be to step up economic restructuring, instead of focusing on the growth rate.
"An annual growth rate of 8 percent to 9 percent should be perfect for economic restructuring, while ensuring improvement in people's standard of living," he suggested.
The government has pledged to pursue the adjustment of the development mode after the global financial crisis challenged the country's rapid development, fueled by massive investment and exports.
The target is set clearly: to create a more consumption-oriented economy, rather than one fueled by high investment and exports; to increase the weight of agriculture, manufacturing and services in the nation's economic growth, while decreasing the influence of industrial production; and to achieve growth led by technology and improvements in management, rather than through high-levels of energy consumption.
Cheng Enfu argued that more reforms to the current economic mechanism were pressing and the government should take into account more factors in assessing the economy, beyond GDP, employment and inflation.
He suggested the government step up reform of its foreign economic development mode, which had been relying on resources, imports, cheap labor and land, and favorable policies for foreign investment.
Indeed, in the second half of this year, the slowing economy and rising domestic and international uncertainties require more cautious and delicate handling of macro controls from the government to get through the difficulties.
(The author is a Xinhua writer.)
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
