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Five features for China's economy in 2003
2004-10-27
We are going to bid farewell to Year 2003, an eventful one. Hit hard by the outbreak of SARS epidemic, China's economy was further trapped by the plaguing natural disasters. Yet that was not the all. Entangled international situation has been added with unfavorable factors and uncertainties to China's development. But China has still managed to have scored achievement better than unexpected amid the worse-than-unexpected difficult situation in its economy. Looking back and taking stock of the year at the yearend, Ma Kai, director of the National Development and Reform Commission, considered China's performance in 2003 as "a long-awaited good situation". He highlighted five features of the good record in this year's economic picture.

The first is the evident improvement in economic benefits with the faster tempo of growth. The GDP growth for 2003 is estimated at over 8.5%. In the first eleven months, fiscal revenue increased by 19.9 percent over the same period of last year and the profit in industrial enterprises rose by 46 percent.

The second feature is the more reasonably structured economy with the higher economic increment. There has been new progress on farm growing structure and regional disposition. The industry is driven forward now mainly by tech intensive industries such as machinery and electronics. 23.7 percent of the industrial expansion is attributed to the hi-tech sector. Fast pace development has been scored in booming service trades, such as telecom, tourism, and logistics.

The third feature is that the innate capability of economic growth is reinforced as the macro-economic policy is still exerting its effectiveness. Enterprises are more motivated and social investment enjoys a speedy rise. The collective and individual investment increased by 9.6 percent for the first 3-quarters of this year and contributed much more to the investment increase than it used to be. It is estimated that the total social fixed assets investment is estimated to be up 23 percent for the year.

The fourth feature is the extended opening-up to the outside world comes along with the pace of coordinated reforms. Substantial steps have been made in the reform of the system for the management of state-owned assets and banking regulatory system. Overhaul on monopoly sectors continued to march forward. Trial operation of rural tax reform was in full steam. The country has opened its door wider to the rest of the world. The total volume of import and export is thought to be more than 30 percent over that of the same period of last year. Foreign investment stood at a high level. The strategy of "going international" advanced.

The fifth feature is that the Chinese people have enjoyed more benefits from the economic boom.

According to the estimation, disposable income for urban residents per capita and net income of farmers per capita increased by 8 percent and 4 percent respectively in the year. As the total sales of social consumers goods was estimated to climb about 9 percent, there was more than 1.6 trillion yuan on the savings account of the urban and rural residents. Another more than 8 million workforce held jobs and the registered unemployment rate can be controlled within the limit as set at the beginning of the year. Social insurance system has been further improved.

But Ma Kai also pointed out some problems that deserve much attention in our economic development. He said that the better the situation was, the clearer the mind should be about the difficulties and troubles in the social and economic development. While chronic headaches on our economy, such as the slow increase in peasants' income and tough unemployment pressure, are still there on one hand, new challenges have arisen, especially the overheating investment in some sectors and the resources bottleneck, which is increasingly restricting the economic expansion. Ma especially argues that the situation where the resources supply may slow down the pace of economic growth deserves attention. He holds that there are signs indicating considerable changes in the demand-supply of energy and primary products and the hampering effects of resources supply to the economy. A sustainable economic expansion would be possible only if we put a halt to the blind investment and low-level expansion in some sectors and some regions, change the sloppy growth style, and make more efforts on resources saving as well as pumping up resources supply.

Ma concluded that as China's economy has made a leap forward in 2003, the performance in 2004 will be very crucial for China's economy to maintain a fast, coordinated, and healthy growth in the year and even a longer period to come. With no big ups and downs.

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