A high-level meeting of the Community Party of China (CPC) held
on Wednesday set the tone for China's economic policy next
year.
The Central Committee's Political Bureau members, chaired by Hu
Jintao, general secretary of the Central Committee and president of
China, officially decided to shift from proactive to prudent fiscal
and monetary policies "to conform with changes in China's
macroeconomic situation and consolidate the achievements of
macro-control."
The meeting was held to analyze the current economic situation
and plan for economic work next year. Other decisions included
improved coordination between various macro-control policies and
proper control of total economic output "to promote steady and
relatively fast economic growth" in 2005.
According to participants, agriculture and farmers' issues will
remain the top priority of the Party next year. Support to
agriculture and rural economic expansion "will be further enhanced
to promote rises in grain production and farmers' income."
Another important task in the coming year will be adjusting the
economic structure in line with domestic and international market
situations and with an eye to improving core competitive power.
Investment in fixed assets will be kept in check by strictly
controlling land and credit supply.
Politburo members also agreed to promote resource conservation
consciousness throughout the nation and accelerate the development
of a "recycle economy."
Building up employment and the reemployment of laid-off workers
and improving social security are high on the Politburo's list of
things to do.
Plans also include stimulating consumption and creating concrete
safeguards for the fundamental interests of the people, speeding
development in the realms of science and education, and balancing
the relationship between reform and development and protecting
social stability.
Participants to the meeting pointed out that economic
achievements did not mean that all problems had been eliminated.
The Chinese economy faces challenges that "urgently need to be
dealt with," they said.
Growth in grain production and farmers' income is still somewhat
tenuous. Meanwhile, the over-investment trend lingers on, together
with some "other deep-rooted problems hindering healthy economic
growth."
China's proactive fiscal and monetary policies have been in
place since 1998. Analysts say that the shift is now being made to
forestall volatility.
The proactive fiscal policy has resulted in seven years of
stunning economic growth, but by early this year the economy was
showing signs of excessive investment and overheating in some
sectors, while inflationary pressures were on the rise.
"A prudent policy is the logical choice to curb overheating of
the economy, maintain steady development and improve the efficiency
of the economy," said Hang Lin, associate research fellow with the
Institute of Macroeconomics under the Chinese Academy of Social
Sciences.
(Xinhua News Agency December 2, 2004)