Home » Opinion » Chinese Views
Officials' false pride in skyscrapers
By Liu Jie and Wang Yaguang |
March 9, 2011, Wednesday
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Print Edition
Print Edition
CHINA has targeted its annual economic growth at 7 percent in the next five years, the lowest annual growth target in two decades.
The move aims to bring "significant improvement in thee quality and performance of economic growth," said Premier Wen Jiabao at the opening of the parliament's annual session on Saturday.
China's economy grew 10.3 percent last year, and registered an annualized rate of 11.2 percent over the past 5 years on the back of brisk export and investment, and significant bank loans.
Rising prices
But rising property prices, a widening wealth gap and other social inequalities underscored the urgency to rebalance the economic structure and enable more ordinary people to share the benefits of the development.
Rapid price rises have become a top concern for the government. "This problem concerns the people's well-being, bears on overall interests and affects social stability. We must therefore make it our top priority in macroeconomic control to keep overall price levels stable," Wen said.
The premier vowed to clamp down inflation, aiming to keep the consumer price increase at around 4 percent this year. China's January inflation remained stubbornly high at 4.9 percent despite a series of measures to cap price rises. The growth accelerated from 4.6 percent in December but was lower than the 28-month high of 5.1 percent in November.
To make the situation worse, higher grain prices after adverse weather conditions worldwide, rising oil prices following regional political tensions and turmoil, and the quantitative easing policies taken by the United States will all add price pressures in China. Zhang Xiaoji, a senior researcher with the Development Research Center of the State Council, forecast China's full-year inflation would be capped under 5 percent this year on a presumption that the world's commodity prices would not continue the steep rise.
"The year-on-year inflation is to top in May, with CPI peaking above 6 percent. It will drop back to 3-4 percent in the second half of the year," Li Wei, a Shanghai-based economist with Standard Chartered Bank said in an e-mail report to Xinhua.
Despite blistering economic growth, Premier Wen acknowledged that much need to be done to solve issues such as income inequality, sky-high property prices and inadequate medical and education services.
A major source of public discontent comes from a reality that resident's income growth lagged behind the rise of state fiscal revenue, which rose by more than 2 fold to 8.31 trillion yuan (US$1.2 trillion) over the past 5 years. However, residents' income edged up little.
According to a World Bank report issued in 2009, the Gini-Coefficient, a major gauge of social equality, jumped to 0.47, surpassing the 0.4 level indicating serious inequity. In response to this issue, the country pledged to increase the per capita disposable income of urban residents and the per capita net income of rural residents by at least 7 percent.
China will strive to ensure incomes keep pace with economic growth and salaries keep pace with increased productivity to make people share the fruits of the opening up and reform, Wen said. "We will adjust income distribution in a reasonable manner. This is both a long-term task, and an urgent issue we need to address now."
Vested interests
Although the calls for reform have been growing more vocally in recent years, the reform is proceeding slowly and it is dragged down by the vested interest groups.
"It is not an easy job," Zhuang Jian said. "It needs government's stronger resolution to make income increase at the same pace with that of the economic growth." The anticipated rise in the threshold of personal income tax is likely to offer a ray of hope for a wider income distribution reform.
The government also pledged to build 36 million units of affordable housing in the coming five years as a part of its measures to cool down runaway housing prices.
"We should change the criteria for evaluating officials's work. The supreme criterion for assessing their performance is whether the people feel happy and satisfied, rather than skyscrapers," Wen said during an online chat with Internet users on February 27.
The move aims to bring "significant improvement in thee quality and performance of economic growth," said Premier Wen Jiabao at the opening of the parliament's annual session on Saturday.
China's economy grew 10.3 percent last year, and registered an annualized rate of 11.2 percent over the past 5 years on the back of brisk export and investment, and significant bank loans.
Rising prices
But rising property prices, a widening wealth gap and other social inequalities underscored the urgency to rebalance the economic structure and enable more ordinary people to share the benefits of the development.
Rapid price rises have become a top concern for the government. "This problem concerns the people's well-being, bears on overall interests and affects social stability. We must therefore make it our top priority in macroeconomic control to keep overall price levels stable," Wen said.
The premier vowed to clamp down inflation, aiming to keep the consumer price increase at around 4 percent this year. China's January inflation remained stubbornly high at 4.9 percent despite a series of measures to cap price rises. The growth accelerated from 4.6 percent in December but was lower than the 28-month high of 5.1 percent in November.
To make the situation worse, higher grain prices after adverse weather conditions worldwide, rising oil prices following regional political tensions and turmoil, and the quantitative easing policies taken by the United States will all add price pressures in China. Zhang Xiaoji, a senior researcher with the Development Research Center of the State Council, forecast China's full-year inflation would be capped under 5 percent this year on a presumption that the world's commodity prices would not continue the steep rise.
"The year-on-year inflation is to top in May, with CPI peaking above 6 percent. It will drop back to 3-4 percent in the second half of the year," Li Wei, a Shanghai-based economist with Standard Chartered Bank said in an e-mail report to Xinhua.
Despite blistering economic growth, Premier Wen acknowledged that much need to be done to solve issues such as income inequality, sky-high property prices and inadequate medical and education services.
A major source of public discontent comes from a reality that resident's income growth lagged behind the rise of state fiscal revenue, which rose by more than 2 fold to 8.31 trillion yuan (US$1.2 trillion) over the past 5 years. However, residents' income edged up little.
According to a World Bank report issued in 2009, the Gini-Coefficient, a major gauge of social equality, jumped to 0.47, surpassing the 0.4 level indicating serious inequity. In response to this issue, the country pledged to increase the per capita disposable income of urban residents and the per capita net income of rural residents by at least 7 percent.
China will strive to ensure incomes keep pace with economic growth and salaries keep pace with increased productivity to make people share the fruits of the opening up and reform, Wen said. "We will adjust income distribution in a reasonable manner. This is both a long-term task, and an urgent issue we need to address now."
Vested interests
Although the calls for reform have been growing more vocally in recent years, the reform is proceeding slowly and it is dragged down by the vested interest groups.
"It is not an easy job," Zhuang Jian said. "It needs government's stronger resolution to make income increase at the same pace with that of the economic growth." The anticipated rise in the threshold of personal income tax is likely to offer a ray of hope for a wider income distribution reform.
The government also pledged to build 36 million units of affordable housing in the coming five years as a part of its measures to cool down runaway housing prices.
"We should change the criteria for evaluating officials's work. The supreme criterion for assessing their performance is whether the people feel happy and satisfied, rather than skyscrapers," Wen said during an online chat with Internet users on February 27.
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