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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4041)	1/1/2005 7:24:53 PM
From: RealMuLan	Respond to of 6370

China tries to bring its roaring economy to a sustainable level China's economic growth will top 9percent 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 ininvestment, though the investment-driven economy had already shownsigns of easing. In April, China's State Council decided to halt the examinationand approval for land for purpose of non-agricultural use, an effort to stop the construction of unneeded factories and copy-catprojects. At the same time, China said projects vital for economic expansion should still be given a helping hand, as demonstrated bya 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 farmerget 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 supportedthe 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 english.people.com.cn