Government sets five economic targets for coming year
Last Updated(Beijing Time):2005-12-15 09:35
By Su Ming
Speaking of the difficulties and challenges confronting China's economic development in 2006, Ma Kai, director of National Development and Reform Commission (NDRC), pointed out in the current National Development & Reform Conference that the long-standing and deep-seated problems restricting the healthy development of China's economy still exists, exhibiting evidently five major problems. Aiming at these problems, Ma Kai put forward some detailed measures:
I. To continue to enhance comprehensive agricultural production capacity and make great efforts to improve production and life conditions in rural areas.
The current situation is that, firstly, a lot of pressure comes from the fall of grain prices. Grain prices in the consumer price index have begun to drop continuously since April compared with the same period of last year. The average purchasing prices of the three varieties of grain (wheat, corn and rough rice) provided by state-owned grain purchase and sales enterprises begun to fall since August. Secondly, the prices of agricultural production means still stay high. The prices of agricultural production means have increased by 9.1 percent year on year in first ten months. Driven by the production cost, the pressure from the rise of the prices of agricultural production means still remains in the next year. Thirdly, cultivated areas reduce year by year. It has decreased from 1.961 billion mu in 1996 to 1.837 billion mu in the last year; moreover a certain amount of cultivated land is designated to be transformed into construction land every year, which leaves limited space to increase grain output by enlarging the areas of cultivated land. Fourthly, the climatic condition is uncertain. Fifthly, it is worth our vigilance for the trend to ignore agricultural and grain production. In addition to these, water resource is not enough and the irrigated areas of only 800 million mu can not fully play their role, which also constitute a disadvantage.
Regarding the grain problem, stable development of grain production is mainly required. Comprehensive agricultural production capacity should continue to be improved and great efforts should be done to keep the total grain output at the same level of this year. Land management and basic farmland protection should be practiced carefully and the grain cultivation areas should be kept stable. The policy of the lowest purchasing price for key grain varieties in short supply in main production areas should continue to be implemented so as to stabilize the prices of the grain market.
II. The excess capacity in some industries should not be neglected; industry planning should be improved and market admission should be done strictly.
Although the production and demand keep balanced basically at present in some industries, it is not allowed to ignore the potential excess capacity. Specifically, the current production capacity in the steel industry has exceeded the market demand. The current production capacity in the electrolytic aluminum industry is as high as 10.30 million tons with an idle capacity up to 2.60 million tons. In the ferroalloy industry, the current production capacity is 22.13 million tons while the operating rate of enterprises is only about 40%. In the calcium carbide industry, the current production capacity is 16 million tons, half of which is idle. In the charred coal industry, its production capacity exceeds the demand by 100 million tons, and there are still 30 million tons under construction and to be constructed respectively at present.. There has been an excess of 2 million cars in the car industry with a constructing capacity of 2.2 million and a proposed capacity of 8 million. The excess problem also exists in industries such as cement, electricity, coal and textile.
At present, the harmful effects of excess capacity in some industries are: firstly, dramatic fall of product prices in some industries. Secondly, great decline of enterprise profits and an increase in deficit enterprises. Thirdly, considerable rise in finished product stock. In the first 10 months, the finished product stock in the steel industry increased by 49% and the growth rate of due debt increased by 11.4% year-on-year. Considering the present trend, the effects of the excess capacity in some industries are still further expanding, and if it is not solved in a short time and left to go freely, the conflict of resource and environment restricts will sharpen obviously, the contradiction of incompatible structure will further stand out, the close-down of enterprises and unemployment will increase dramatically and the bank's bad loans will further expand.
III. Conflicts of the unbalanced import and export trade increase and the structure needs to be adjusted to change the growth mode of the foreign trade.
Since 1994 when the foreign trade changed from deficit to surplus, there occur certain amounts of surplus every year. The trade surplus has increased dramatically this year and it has reached US$ 80.4 billion in the first ten months, which is 2.5 times of the surplus in the last year. It is expected that the annual trade surplus this year will approximate US$ 100 billion. The excessive surplus will bring many bad effects: in the first hand, it will sharpen the international trade frictions. China has become the one which receives the most international antidumping investigations for successive 10 years. In the second hand, with the increase of surplus, the foreign exchange reserve expands greatly; as a result the mirror image of foreign exchange reserve also increases greatly, which enhances not only difficulties in currency regulation and control but also the pressure of RMB appreciation so as to incur the inflow of speculative capital. And last, the exported goods with generally low technology content as well as the over-rapid export growth of goods with high energy consumption, high pollution and resource goods also prick up the contradiction between the domestic resources and environment, which is unfavorable for the sustainable development.
It needs to make efforts to adjust export structure to keep stable increase of China's export. Export tax rebate policy should be improved to encourage the act to expand common trade export, especially the export of products with high-technology and high added value. The list of forbidden processing trades should be revised to promote the transformation of such kind of trades. The export of products with high energy consumption, high pollution and resource products should continue to be controlled. The early-warning system for key commodity export and the system of coordination and treatment of trade frictions should be improved. Import of the important commodities in short supply and equipments with advanced technology should be increased. The utilization of foreign capital and overseas investment should be further carried out smoothly.
IV. Coordination and cooperation are required to differentiate different situations with corresponding encouragement and restriction; systems and mechanisms should be improved to constrain blind investment.
Presently, the pressure of investment rebound still keeps heavy. Firstly, the growth rate still stays high. Although the growing speed of the investment this year reduces a little, it still maintains at a high level. In the first 10 months, the growth rate of the investment in fixed assets in urban areas achieved 27.6 percent. Secondly, constructions with big scale still exist. The investment in fixed assets of the country in the first three quarters was RMB 22.4 trillion, equivalent to the work capacity of three years on account of the investment amount in the last year. Thirdly, there is considerable increase in the newly-operated projects. In the first 10 months, there were 147,000 newly-operated projects, 27,000 more compared with the same period of last year; the total proposed investment is over RMB 5 trillion, increasing 28.5 percent. Fourthly, the investment rate keeps rising. The ratio of fixed capital formation was as high as 44.2 percent last year and it is expected to further increase this year probably. Fifthly, strong investment impulses still exist in some areas. The growth rate of broad money M2 keeps rising month by month. Furthermore, the high price of the crude oil will further drive up the prices of the downstream products so as to increase economic operation cost.
The countermeasures are to continue to control the two valves of land and credit. The most strict land management system should be enforced that the scale of the transformation of agricultural land into construction land in the next year is controlled in principle at the same level of this year. Continue to carry out cleanup and rectification work in the developing zones and improve the policies set up in these zones. Put reasonable control on mid-and-long-term debts and strict control on loans for the over-expanding industries. Continue to implement the published readjustment and control measures so as to lead healthy development of real estate market, increase the supply of common commercial residential building and economically affordable housing and control the development of top-graded real estate.
V. Expand employment, improve social security system and solve the problems of common concern in the process of development.
Currently, China's situation is characterized by heavy employment pressure, unsound social security, expanding income gap, unauthorized collection of fees by educational institutions, hard access to medical care and sever situation of safe production. Many problems gathering intensive attention from the multitude involve in such aspects like environmental protection, restructuring of enterprise, land acquisition and migration of people in the reservoir areas. The situation of highly pathogenic bird flu and the prevention and control of major epidemic diseases is severe.
Our measure is to first solve the most direct, practical and realistic profit problems people are concerned about so as to expand employment and improve social security system. First, carry out smoothly such work as employment, social security and income distribution. Cooperate with the departments concerned to promote and improve the policies and measures of employment and re-employment, and study and set up the special assistance system of employment for the areas, industries and people in difficulty. Support the development of community employment and flexible employment. Study seriously the problems of social security for the rural labors working in cities. Organize researches and put forward the general thoughts and related policies to promote the reform of income distribution system. Secondly, promote the coordinative development of education at all levels. Further promote the balanced development of the compulsory education. Thirdly, strengthen public health construction. Adjust and optimize the layout of city medical treatment resources and make greatly efforts to develop community health service. Fourthly, make great efforts to develop such causes like culture, tourism and sports. Fifthly, speed up the promotion of emergency system.
Source:CE.cn
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