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Home >> Opinion
UPDATED: 15:49, September 01, 2004
Experts predict: China's 10 major risk factors before 2010
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One must think of danger in time of peace. At the time when the "11th Five-Year Plan" is in the making, the topic group of the National Development and Reform Commission conducted an survey among 98 well-known Chinese and foreign experts from various ministries and commissions under the State Council, major scientific institutes and academies, main people's organizations as well as foreign universities and international agencies stationed in China. These discipline and army leaders from different fields carried out scientific predictions and analyses of the factors, spheres and impacts of risks that may affect China's economic and social sustainable development during the country's "11th Five-Year Plan" period (2006-2010).

Question of Employment
In a considerably long period of time to come, China's labor market will be in a state of oversupply. Some experts point out that relying merely on tactical measures for controlled operation for the solution of the employment issue has proved to be of no avail, so major adjustment must be made of the strategy for national economic development in accordance with the human-oriented development concept.

Question of Farmers, Countryside and Agriculture
Over the past dozen years or so, although China's national economy has grown at a rate well over 7 percent, agriculture was almost an unprofitable sector, and farmers' income was basically stagnant. Leaving villages for cities to seek jobs is the basic choice for farmers to shake off predicament, but these farmers have not changed their own social status as a result. Due to the huge rural population, the shift of rural labor force will be a long-term task. At present, rural group incidents are on the increase in terms of quantity, scale and antagonism, farmers' political appeals are growing increasingly strong. The most favorable policy for the solution of the question of farmers and farmer-workers is no more than a good-treatment method adopted by the government. The fundamental change in the working styles of grass-roots governments at various levels, particularly the basic rural political power and urban grass-roots governments in association with farmer-workers is key to alleviating the critical issue of farmers, countryside and agriculture.

Question of Finance
China's savings ratio is high and its capital formation is smooth, but its capital market and financial system have long been imperfect. The financial system lacks a driving force and supervisory function to guide capital to flow smoothly into the realm of production, this is the biggest defect in China's economic development, as well as the fundamental reason for the deteriorating business environment of Chinese enterprises. Affected by the non-performing loans of State-owned enterprises, the reform of banking system is going slow, thus increasing financial risks as a whole. The status quo of the financial sector is possibly the greatest risk endangering China's economic security.

Poor-Rich Gap
The gap between the poor and the rich in China has gone beyond the international warning "red line", its direct result will be that social security, especially public security, will be greatly harmed, this problem must have our high attention.

Question of Ecology and Resources
China is faced with a serious environmental problem, water and air pollution, soil erosion as well as the shortage of water resources have gravely affected people's health and hindered economic growth.

Taiwan Issue
Since the mid-1990s, the Taiwan issue has been developing in a direction we don't want to see. Future development trend of the Taiwan question depends on Taiwan's popular will, how to win the Island's popular feeling will be key to the central government's policy toward Taiwan.

Question of Globalization
The influence of accession to the WTO (World Trade Organization) is not manifested in several main industries as we first expected, and the influence of the WTO will be manifested in affecting the deep-seated structure of China's economic and social development through its rules.

Experts point out that in a period of time to come, China will possibly maintain a fairly high rate of FDI (foreign direct investment). However, there also exist some uncertain factors, the amount of foreign capital China attracts in the future will depend on investment risk, tax rebate, etc. in comparison with other countries.

Factors really affecting China's economic and social sustainable development in the future will perhaps remain a structural problem within China's economy and society: for example, the irrational structure of demand, the exacerbated contradiction of the industrial structure as well as the change and disharmony between the selling price of capital goods and the consumer price of residents, etc.

The question of tackling crisis at home is the factor of crisis to people's great concern, tackling crisis involves many factors, it includes problems such as corruption, the construction of a legal system, the reform of the political system, relations between the Party and the masses, and the decline in the legal authority of the government. The direction for the solution of this problem seems to be the need to clearly define the limited responsibility of the government, and stress the roles and responsibilities of people's organizations in public affairs.

Question of Confidence and Creditability
The questions of creditability and confidence is linked together with the issue of tackling crisis, people's loss of confidence and lack of creditability is closely associated with the graft and corruption of certain government officials and the perversion of social mores. The question of trustworthiness not only concerns morality, it is also a systemic issue. The difference between the status quo of China's current credit and that of developed countries is manifested mainly in the following: Enterprise credit is low, citizens' personal credit is basically non-existent, commercial banks have serious hidden risky trouble. The deep-seated influence of the void of credit on China's national economy is manifested mainly in the curtailment of consumption and the containment of investment, which directly result in a tremendous loss of the total national economic output value, increase financial risks and cause chaos in market economic order. How to re-establish confidence and creditability in the general public may be the most difficult challenge facing China's long-term development.

Question of Aids and Public Hygiene
In the opinion of UN experts, unless China adopts effective measures, otherwise, the number of Chinese infected by aids virus will far surpass the estimated 10 million and may reach as high as 30 million, in that case, China will become a country with the most aids virus infected people in the world. This is by no means an alarmist talk. Besides aids, the problem of hygiene brought to light by the crisis of SARS last year will hamper China's economic development for a long period of time to come.

By People's Daily Online

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