Guided by a scientific outlook on development, China's economy is moving on a fast, sound track. The national economy has been growing rapidly for five years on end; has a GDP volume exceeding 21 trillion yuan; and ranks fourth in the world. There is a higher quality of development as central revenue increased; corporate performance was enhanced; agricultural production was boosted; and the income for urban and rural residents was enlarged. The nation possesses a stronger economic framework with the completion of the Three Gorges Dam; the opening of the Qinghai-Tibet Railway; and the beginning of the south-north water diversion project. Society is marching towards a comprehensively well-off one, as we beat off the SARS epidemic; strengthened social construction; improved the nation's ecology; and improved people's standards of living.
China has gone through a rocky road in the last five years. When we had just stepped out of the shadow of the Asian financial crisis and the threat of five-year deflation, we met SARS head on. When we beat off SARS and regained the trend of fast economic growth, we found ourselves facing a situation of overheated investment in certain sectors and an overall tight supply of coal, electricity, oil, and transportation. When we reversed the situation through macro-regulations, we faced excessive growth in investment, credit and foreign trade surplus.
To prevent the fast-growing economy from overheating, a series of macro-regulation measures were launched this year. Of these, financial policies included issuing central bank notes; raising deposit reserve ratios; and raising deposit and loan interest rates. By now, positive results have been seen. During the first half of this year, fixed assets investment grew 25.9 percent year on year, with the growth rate dropping back 3.9 percentage points. The relationship between investment and consumption has improved and consumption has contributed more to economic growth.
Efforts were also accelerated to eliminate obsolete production capabilities. During the first six months, the outdated production capacity for 5.51 million kW of thermal power and 5 million tons of cement were stopped; and 2,811 small coal mines were closed down. Export growth began to fall back and import growth rose steadily. In August, China's trade surplus rose 32.8 percent over the corresponding period of last year – 48.1 percentage points lower than during the first seven months.
Related authorities also endeavored to control high energy consumption and high pollution sectors; and achieved positive results in the regard. Land and credit approval were under strict control to prevent new high energy-consuming projects. Higher electricity prices were imposed on such projects; and preferential policies for them were withdrawn. During the first half of 2007, China's energy consumption per unit GDP dropped 2.78 percent; and energy consumption per unit added value of industrial enterprises above the designated size decreased by 3.87 percent.
This year, the state has secured stable agricultural production by putting more funds into infrastructure; and stabilizing prices of grain, fertilizer, and fodder. Despite serious natural disasters, the nation witnessed a summer grain harvest – the first in four consecutive years since 1985 – and is expecting an autumn harvest, as well.
By the end of June, a minimum living standard guarantee system was set up. It covers 20.68 million rural residents in 31 provinces, municipalities, and autonomous regions. What is more inspiring: farmers' cash income grew rapidly. During the first half of 2007, farmers' per capital cash income stood at 2,111 yuan nationwide, rising 13.3 percent year on year in the fastest-growing period since 1995.
The general public also enjoyed more benefits in the fields of education, employment, medical care, housing, subsistence guarantees, labor interests and work safety. During the first six months, income for urban residents increased by 14.2 percent; and 6.29 million jobs were created in urban areas.
By People's Daily Online
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