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Following this year's robust performance, China's economic growth is on track to exceed 8 percent in 2004.
That's the forecast from a group of esteemed economists at the Chinese Academy of Social Sciences. But they suggested phasing out the country's proactive fiscal policy and putting the brakes on the rapid growth of loan supply.
The experts also suggested more feasible measures be established to boost domestic consumption.
As for the growth estimate, the Ministry of Commerce is more cautious. In its latest report on foreign trade, the ministry said China's gross domestic product (GDP) for next year will be 7 percent higher than 2003, thanks to efficient domestic policies and the rebound of other major economies around the world.
The National Bureau of Statistics didn't release a clear indicator for next year's growth rate, but said China's economy, which will register 8.5 percent growth in 2003, will maintain its momentum.
Despite the encouraging predictions, the economists and officials said the country needs "coordinated readjustment" in terms of fiscal and monetary policies to ensure speedy economic growth. "The rapid growth rate is no problem, but we need readjustment in fiscal and monetary policies," the academy economists said in a report.
Partly due to proactive fiscal policies since 1998, China has achieved rapid and stable growth in economic development. "But the economy has become mainly investment-oriented," the report stated.
Investment has accounted for more than 60 percent of the total volume of GDP during the first half of this year, up from 26.5 percent in 1998.
"We should consider cutting down the scale of treasury bonds next year," the National Bureau of Statistics said in its report.
So far this year, the government has issued 140 billion yuan (US$16.9 billion) of treasury bonds, as compared with 150 billion yuan (US$18 billion) for the whole of 2002.
All the experts agreed the private sector should play a more prominent role in China's economic development.
"In the market economy, we should change the role of government, and enterprises and the private sector should become the backbone of investment," said Wu Jinglian, an economist with the Development and Research Center under the State Council.
(China Daily November 6, 2003)
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