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Director Bai Hejin with the Economy Research Institute of the State Development Planning Commission (SDPC) was lately interviewed on four major macro control-regulation goals of post-16th-Congress China.
Reporter: Comrade Jiang Zemin had in his 16th Party Congress Report called for a sound modern market buildup, enhanced macro control-regulation, a booming economy, increased job opportunities, stable market growth and balance of payments as four major goals to be achieved in the first 20 years of this century. In view of this, would you please give your views about the four goals set?
Bai: Economic growth, inflation rate, employment and balance of payments are four crucial variables on a close link in a macro economy, one binding the other and influencing each other, known Western economists as "mystical four angles" for they are often not in an ideal or reliable state.
Macro control-regulation rests with an appropriate handling of the relationship of the four variables for the most ideal balance point to be found varying at a different level and stages of development. Enlarging domestic demand as at present forms the basic direction of our macro control-regulation work for a growth of the economy.
Irrespective of an overall shortage of material supply as we had previously met in the past 20 years we quadrupled our GDP on the basis of an optimization of the economic structure and efforts for a raise of productivity and "greater wealth" having been created. Only by a sustainable speedy economic growth can we make true our dream of a better-off society in an all-round way.
Meanwhile, other three goals must also be given the fullest attention as they are closely connected with each other. Take employment for example, an ever-expanding economic cause on scale will undoubtedly create more jobs easing the pressure of "more people but with fewer rice bowls" and helping us to make new economic advances and maintain social stability.
As price behavior with employment forms two sides of a market economy, increased employment compels a rise of market demand. A greater market demand than a shortage of material supply will give rise to a deflationary market, a drop of employment rate and a reduction of people's purchasing power affecting a sound development of the economy.
Various inflationary factors and a deflationary market should be averted for a viable macro environment -- better market anticipations by people, investors, operators and customers -- an environment free of a twist of economic operations and orderly distribution of interests to be created.
Since after joining the WTO, China has forged a multitude of close economic and trade ties with its WTO counterparts. In absence of effective macro control-regulation -- a lack of international payment equilibrium there will be no way for economic advances to be made.
2. Reporter: How are the actual situations of macro control and regulation as we have seen in China today?
Bai: The situations are fine. Against an overall sluggish economy across the world, we have by our economy kept a 7-8 percent growth. This year we are going to reap over 10 trillion yuan of GDP. Irrespective of a devastating Asian financial crisis as during China's 9th Five-year Plan years we have put a risky inflationary market and a shrink of market demand under effective control.
Known to China there were nearly 300 million new jobs provided in the past 20 years and about 150 to 200 million of rural surplus labor found in the country's second and tertiary industries. The last three years have seen a considerable number of laid-off workers with jobs found to put the country's unemployment at a 4 percent less as a thing unknown in world's history.
By balance of payments we have also made "breakthroughs" away from the eerie course of "trade gaps and investment gaps". We have realized a year-on-year trade surplus as by now ranking the country first in using foreign investment, with a forex surplus, praiseworthy balance of payments, keeping a stable exchange rate of Renminbi and an export worth far over the country's foreign debts.
It goes without saying there still remains much to be desired for a perfect macro-control buildup in China. As demanded by the goals said we must do away with all possible inflationary uncertainties and the pressure of a deflationary market. We must in no way deal lightly with every crucial social problem as people's employment and the work regarding macro control-regulation.
3. Reporter: We note that setting goals attending to the unemployment problem as part of the work of the country's macro control-regulation the CPC 16th Congress has also further put forward the point "increase employment" and "full employment". How are your views on this point?
Bai: Employment is the basis of people's livelihood and a solution to the problem of people's employment is among the priorities we have to tackle as our long-term task. Being in such a large country as ours we have got a population of near 1.3 billion with a labor force of over 900 million posing us inestimable labor potential.
As things are in China today, a heavy economic and institutional reform program and a strategic restructuring of the economy's economy launched has resulted in countrywide institutional and structural unemployment.
In the face of a dual economic structure as that of the country's, employment has become a problem of paramount importance to a workforce of hundreds of thousands of surplus rural laborers to be employed.
Once we had an economic growth and elasticity coefficient of employment as much high as 0.8. But this has by now dropped to 0.2 less. We must do every possibility to enlarge the modulus of our employment as is needed for a large inexhaustible labor pool we have got.
Things are also making this all the more necessary for us to fully act on the important thought of "Three Represents" and ensure people a happy life and overall social stability in China. But at the present stage, we still cannot guarantee a full employment rate of people in the country economists said because our economy is still not at a level to meet the demands of all job seekers.
We have by all means bring about a growth of our economy, create new jobs, open up employment markets, tap employment potential, perfect a large social security system, do all efforts to increase employment and put the unemployment rate within a bearable scope.
(People's Daily November 21, 2002)
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