Demand for export, consumption and investment will maintain robust growth in 2005 and support China's economic development. The three elements of production, land, capital and labor are not deployed in conformity with rules of market economy yet; therefore the task of macro control is still arduous.

Based on four reasons I believe the Chinese economy will retain fast growth in 2005.

First, the Chinese economy is still in the new round of growth, which features three trends, i.e., urbanization, new industrialization and internationalization.

First, we are in an urbanization process. This process is developing fast and has become a trend.

The second trend is new industrialization. It refers to the accelerated growth of information industry, reform and penetration of traditional industry, and proper development of heavy chemical industry. The new industrialization, especially IT industry's reform of traditional industries, will push the economy to grow rapidly.

Internationalization comes as the third trend. China has actively participated in regional cooperation under globalization. China's import and export trade has kept on growing. The processing trade, in particular, develops fast. We can see this trend from the fact that the FDI volume and contractual volume of FDI have increased by 22 percent and 30 percent respectively from Jan to Nov.

Resident's consumption level is rising rapidly. The consumption level of residents will rise quickly since the per captia GDP in China has reached US$ 1, 000. In the first three quarters of 2004, the disposable income of residents in urban areas and townships has increased by 7 percent; rural resident's average income in cash has risen by 11.4 %. Rise of resident's income has founded a basis for elevation of consumption level.

All these constitute my first reason: the Chinese economy is in a period featuring rapid growth.

The second reason- the world economy will be in a period of mild increase in 2005. According to forecast of the IMF, the world economy is to grow at 4.3 percent, though it is lightly lower than 5 percent in 2004.

The trade volume in the world will reach 7 to 8 percent. Therefore the world economic environment is still favorable for Chinese economic development.

Third, the macro control policy is beneficial to smooth and rapid growth of the Chinese economy. Strictly speaking, macro control is government's management of macro economy, so it should be consistent and should not be directed at a specific time or issue.

China will remain stable both in monetary and financial policies. Does this mean the finance's support to economy will be weakened? The deficit is to decline slightly; the issuing of long-term national debts will be reduced a little. These will result in reduction of demand in investment. However, the overall financial policy will not have big impact on the economy next year for we have adopted some policies to make it up, for instance, exemption of agriculture tax.

Fourth, demand for export, consumption and investment will see robust growth in 2005. The special characteristics of China's export trade determine that Chinese economy will retain balance or surplus in next few years. Processing trade accounts for more than 50 percent in import and export trade; the foreign invested enterprises takes over 50 percent in export and import trade. These two factors determine China will have surplus in its foreign trade. The demand for consumption will grow fast because of big increase in people's income.

A reasonable growth rate in demand for fixed assets investment will be kept as well. A couple of indexes have shown us some signs. For example, compared with the same period in 2003, the investment in projects under construction has grown by 30 percent; and investment in newly-begun projects has increased by 20 percent. They have founded a good base for the growth of investment in fixed assets in 2005.

In addition, the contractual value of foreign investment is increasing at above 30 percent. The three demands will form good support to development of economy in 2005.

A number of problems in mechanism, system and growth pattern still exist. For instance, the three elements of production, land, capital and labor will likely to cause fluctuation of economy, for they are not deployed in conformity with rules of market economy. Therefore the macro control will be confronted with challenges in 2005.

The article is written by Zheng Jingping, spokesman of the State Statistics Bureau and translated by People's Daily Online.