China targets an eight-percent economic growth this year and will take measures to keep the development "fast" and "steady", said Chinese Premier Wen Jiabao in his government work report delivered Sunday.

Beijing Times interviewed several experts on the government work report.

Economist Justin Yifu Lin as a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) explained that to keep a fast and steady development and to avoid big ups and downs are the key tasks in economic work.

To solve various problems that arise during development, China needs to accelerate its development, but it is even more important to keep it stable and avoid risks.

Lin added that over the past two years, the contradiction between resource demand and supply remains serious. Thus the GDP growth rate shouldn't be set too high. The target of eight percent is lower than 10 percent of the past three years, but higher than the annual average of 7.5 percent proposed for the 11th Five-Year Plan Period (2006-2010).

"Judging from factors such as market demand and fund, this speed will work," said Lin.

Yang Kaizhong, deputy director of the Capital Development Institute of Peking University, said that eight percent is just a continuation of last year. This rate reflects the government's scientific concept of development which seeks coordinated and sustainable development.

"This is a very positive target. It shows the government pays more attention to social environment, science and technology, people's life, culture as well as eco-system and environment to achieve a harmonious society in an all round way.

Energy-efficiency indexes listed in government work report for the first time

The government work report says energy consumption per unit of GDP should fall by four percent in 2006.

Yang Kaizhong explained that China has entered a development stage that is restricted by resources.

"Energy-efficiency indexes being written in government work report is based on China's current development stage and world development environment. This reflects the government's awareness of environment protection," said Yang.

Yang said it points to the direction of industrial restructuring, that is control the scale of high energy-consuming industries and promote the development of low energy-consuming industries.

It also stimulates enterprises to conduct technical innovation. The target will focus on industries such as iron and steel and chemical industries. The mentioning of energy efficiency in the report also popularizes energy-saving awareness of the public and change people's ideas and living styles.

Long-term treasury bonds cut

The report says China will continue to reduce the issuance of long-term state treasury bonds to 60 billion yuan, 20 billion yuan down from last year and reduce fiscal deficit.

Yi Xianrong, economist and director of Finance and Development Department of Chinese Academy of Social Sciences (CASS), said to reduce treasury bonds means to strengthen financial policies.

Treasury bonds are important state assets. Downsizing can gradually reduce its operation cost. This can also help narrow the big gap between savings and loans of the banks.

A report by China's central bank says that by the end of last year, the difference between savings and loans in China was as high as 9.2 trillion yuan.

Meanwhile, Yi Xianrong said to apply the international practice of outstanding balance management is a breakthrough in China's state bonds issuance system.

Through this approach, within a year, the Ministry of Finance can decide with flexibility how long and how often it will issue the treasury bonds according to deficit and the situation on financial market. This management will be very efficient as it aims to reduce cost and increase revenue. It is expectable that there will be one year-long bonds and they will become popular among investors.

Renminbi will continue to appreciate

The report says China will improve the mechanism of interest rates formation and transmission, perfect the managed floating exchange rate regime, and keep the Renminbi exchange rates basically stable at a reasonable equilibrium.

On the Renminbi exchange rate, Justin Yifu Lin said China will implement a more flexible exchange rate system, but the move should not be hasty.

Lin said Renminbi will continue to appreciate this year, but he estimated under three percent, one percentage point higher than last year.

He said an active, controllable and gradual way will be continued.

Lin said the managed floating exchange rate regime will definitely affect people's financing. People can buy foreign goods at lower prices. In addition, Yuan's appreciation will play as a support for investment in real estate, etc and physical assets investment by households might be hot in the future.

By People's Daily Online