The Caijing Magazine Annual Conference: 2006: Forecasts and Strategies was held on December 12 in Beijing, attracting the active participation of leaders in government, international organizations, business and academia.
Deputy Director of the Central Financial Work Leading Group Liu He, Chairman of China Insurance Regulatory Commission Wu Dingfu, Chairman of China Securities Regulatory Commission Shang Fulin, Chairman of China Banking Regulatory Commission Liu Mingkang and Governor of Zhou Xiaochuan made contributions at the conference.
Although China maintained sound economic development this year, two new problems of overproduction and unbalanced imports and exports still emerged and addressing them will be underscored in next year's macroeconomic policies, said Liu He.
After a growth rate of 25.8 percent in 2004, fixed asset investment is still expected to grow over 20 percent this year.
According to Liu, rapid increase in investment has caused overproduction in industries like steel, cement, iron alloy, and the problem is also looming in industries such as automobiles and textiles, resulting in enlarged stockpiles and price drops.
The imbalance in foreign trade should also be underscored in the coming year.
Due to slower import growth, domestic overproduction and transfer of processing trade to China, trade surplus this year is expected to reach US$100 billion.
China should increase imports of hi-tech products in 2006 and include factors such as environmental protection, safety and social security into enterprises' export costs.
The major goal of next year's macroeconomic policies will be to maintain a fast and stable economy and fend off periodic economic fluctuations. Liu said that six points should be emphasized:
--Boost domestic demand and enable it to play a bigger role in driving the economy forward.
--While adjusting the investment structure, put more emphasis on expanding consumer demand. Further improve the domestic consumer environment and create positive consumer expectations. Adjust domestic income distribution, steadily raising the proportion of middle-income group and augmenting the income of the low-income group.
--While stabilizing export and adjusting export structure, expand import by various means and international negotiations.
--While effectively utilizing foreign investment, continue the "go out" strategy. On a mutual benefit basis, encourage domestic enterprises to invest overseas and convert domestic savings into investment.
--When China is facing the problem of overproduction, intensify the adjustment of domestic supply pattern. Perfect the market competition order and enhance the concentration level of industry structure and organizations with price reform, anti-monopoly and government function transform as the emphases.
--Promptly improve social security systems. Rigorously enforce environmental protection and safety standards and make enterprises' internal cost manifest the genuine social cost.
(China.org.cn by Yuan Fang December 21, 2005)
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