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Economist: Central Government Signals Slowing Growth Guideline

The Chinese government sent a clear message Thursday that it will abandon its pursuit of a high growth rate of GDP this year to focus instead on improving the quality of economic growth.

 

Premier Wen Jiabao said in his Government Report this morning that the target growth rate this year was around 7 percent, which is remarkably lower than the actual economic growth of 9.1 percent last year.

 

Yao Jingyuan, chief economist of the National Bureau of Statistics (NBS), said the premier sent a clear signal that from now on, realizing inclusive, balanced and sustainable growth will be the priority of government officials at all levels.

 

According to NBS estimates, China will be able to achieve the goal of doubling its gross domestic product (GDP) from 2001 to 2020 by maintaining an annual growth of 7.18 percent.

 

Therefore, the central government's decision to lower the expectation of growth would greatly relieve the burden on local governments, Yao said. Over the past years, local officials usually set higher goals than the national growth for fear of being left behind.

 

Premier Wen said the 7 percent target encouraged all sides to focus on deepening reform, adjusting the economic structure and improving the quality and efficiency of economic growth and to devote more financial and material resources to promoting social development and strengthening weak links,

 

Wen said the central government had taken into consideration both the need for continuity in macro-control and the relationship between the pace of economic growth and the conditions for its attainment, including supply and demand in energy, important raw and processed materials, and transport capacity. The government had also taken into account the need to alleviate the pressure on resources and the environment.

 

Yao said as a result of improved economic efficiency, the total yield of the economy would continue to grow even if this year's growth rate was slightly lower than last year.

 

He said the Chinese government would focus more attention on improving the well being of the people, which could not be fully reflected in GDP growth. The government faced an even harder job in carrying out the people-oriented economic policy.

 

(Xinhua News Agency March 6, 2004)

 


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