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China vows to promote transformation of development pattern in 2010

 

BEIJING, Dec. 7 (Xinhua) -- The Chinese government pledged Monday to push forward the transformation of the nation's economic development pattern next year while maintaining stable and comparatively fast economic growth.

Participants at the three-day annual Central Economic Work Conference agreed that the government should coordinate efforts to maintain stable and comparatively fast economic growth and speed up the transformation of the economic development mode.

The Central Economic Work Conference, held once a year to set the tone for next year's economic development, comprises policy-making officials from central and provincial-level governments, including President Hu Jintao and Premier Wen Jiabao.

 

MAINTAINING MACRO-ECONOMIC POLICY STABLE

China would maintain the continuity and stability of macro-economic policy and continue implementing the proactive fiscal policy and moderately easy monetary policy next year, according to a statement released after the conference.

This was within market expectation as a meeting by the Political Bureau of the Communist Party of China Central Committee last month has made such statement.

The unchanged policy stance was responding to an improving but still unstable economic situation, both domestically and globally, said Zhao Qingming, a senior researcher at China Construction Bank.

It reflected the cautious attitude of China's policy makers over the stability of economic recovery, said Lu Zhengwei, an analyst at the Industrial Bank.

This year was the most difficult one for China's economic development since the new century as the global financial crisis continued worsening and spreading since the fourth quarter last year and world economy was trapped in serious recession, according to the statement.

Economists believed it was necessary to maintain the macro-economic policy stable next year as there were still many uncertainties, both domestically and globally.

China's economic growth has approached its pre-crisis level a year after the adoption of the 4-trillion-yuan (585.6 billion U.S. dollars) economic stimulus package.

The country's gross domestic product (GDP) grew 8.9 percent year on year in the third quarter, accelerating from 7.9 percent in the second quarter and 6.1 percent in the first. In the third quarter last year, it increased 9 percent year on year.

 

TRANSFORMING DEVELOPMENT PATTERN A MORE URGENT TASK

The global financial crisis highlighted the urgency to transform China's economic development pattern, the statement said.

Despite a guarantee of the 8-percent growth target this year, some economists suggested a re-balance of the country's economy, saying it should wean its growth off previous reliance on expansion in foreign trade and investments.

Although the country's exports waned because of the weak external demand, the government-led investment remained a major engine to boost economic recovery, which would discourage private spending expansion, said Jia Kang, director of the Research Institute for Fiscal Science at the Ministry of Finance.

According to government statistics, China's GDP increased 7.7 percent year on year in the first nine months this year. Consumption contributed 4 percentage points to the GDP growth, investment accounted for 7.3 percentage points while exports subtracted 3.6 percentage points.

The government would continue efforts to boost domestic demand, to expand people's consumer demand in particular, and make consumption contribute more to the economic growth, the statement said.

The government vowed to continue and enrich current policies to enhance domestic demand, including the subsidized rural purchase programs of home appliance and autos.

It would also seek to push recovery of exports and promote balanced international trade, it said.

More efforts would be spent on deepening economic system reform and enhancing the momentum and vigor of economic growth.

The government vowed to balance the tasks of ensuring a stable and relatively fast economic growth, adjusting economic structure and managing inflation expectations next year.

This was the second time the government mentioned managing inflationary prospects in a national event after a State Council meeting in October picked out the issue as one of the key points in macro-regulation for the rest of 2009.

However, economists ruled out the possibility of serious inflation in the country. Tang Jianwei, senior analyst of the Bank of Communications, expected the country's consumer price index, a major gauge to measure inflation, to increase around 4 percent year on year in 2010.


 

 


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