China's State Council has approved a proposal to invest 4 trillion yuan through 2010 to help boost domestic demand. An executive meeting of the State Council said on Sunday that the country will adopt "active" fiscal policies and "moderately easy" monetary policies.
The meeting, presided over by Premier Wen Jiabao, said given the volatile world situation, China has to adopt flexible and prudent macro-control policies.
It has worked out ten measures to boost fast but steady economic growth by expanding domestic demand. And it's estimated that investment in infrastructure, social welfare and other key sectors will amount to 4 trillion yuan by the end of 2010.
The meeting pointed out that the first thing to do is to speed up guaranteed housing projects to provide more housing for low income people. The government will also enhance infrastructure development across the country, in things such as railways, highways and airports, and especially in rural areas.
In addition, the government will also speed up the development of health care, cultural and educational causes. And it will enhance environmental protection projects by supporting energy saving and pollution reduction projects. In terms of its industrial development, China will stress innovation and structural adjustments by supporting the development of hi-tech and service industries.
Other measures also include pushing forward reconstruction work in quake-hit zones, increasing people's incomes in both rural and urban areas, launching reforms of the value-added tax, and giving more support to the financial sector.
The meeting said the central government will first invest 100 billion yuan in the fourth quarter of this year. While another 20 billion yuan will be invested next year for reconstruction in quake-hit zones.
The meeting stressed that although China is facing great challenges, it still has huge potential in its domestic demand. And it expressed confidence in maintaining steady and fast growth.
(CCTV November 10, 2008)
