China's leadership vows steady growth

ECONOMIC MEETING: In contrast to the government's former policy of fueling expansion, it is now looking for stable growth and aims to hold prices steady


Tue, Dec 07, 2004 - Page 12

China's leaders pledged at a key policy meeting to keep the economy on track next year while raising farm incomes, promoting energy conservation and holding down investment in overheated industries, state media reports said yesterday.

The Chinese economy is forecast to grow by a blistering 9 percent this year -- far above the official target of 7 percent -- and Beijing is watching warily for signs of possible inflation that could fuel social unrest and threaten the country's banks.

President Hu Jintao (胡錦濤) and other members of the Communist Party's ruling Standing Committee issued the plans at a three-day conference that ended on Sunday, state media said in reports that received blanket coverage in newspapers, radio and television.

The government "will continue to put macroeconomic control on top of the agenda for next year's plan in order to maintain a steady and comparatively fast economic development and basically stable prices," the reports said.

Fiscal Control

The commitment to low inflation and fiscal control marks a firm turn away from Beijing's former policy of fueling faster economic growth by pouring money into the economy through heavy spending on highway-building and other public projects.

The reports didn't say whether Beijing is any closer to granting demands by its trading partners to let its tightly controlled currency, the yuan, trade freely on world markets.

The US and others contend the yuan's government-set value is too low, making Chinese exports unfairly inexpensive and hurting competitors.

But they affirmed Beijing's commitment to closer integration with the global market, saying, "China is to open its door wider to the outside world."

Farmers Targeted

Hu and other Chinese leaders promised to ensure that the populous but poor countryside isn't left behind by the galloping boom, so as to build "a harmonious society," the reports said.

It said incomes for farm families were up 11 percent this year.

The average farmer made 2,110 yuan (US$255) in the first nine months of this year, the report said. The average city income is more than three times higher.

Rural Support

"Our support for the rural areas will be further strengthened next year," the government statement said.

Efforts reportedly already under way include improving irrigation, building roads to connect farmers to city markets and cracking down on officials who seize farmland to construct unneeded hotels and factories.

At the same time, the reports said Chinese leaders recognized the movement of workers from the countryside to cities as "an important part" of China's growth strategy.

Other urgent tasks include creating jobs, improving the pension system for the country's ballooning population of retirees and nudging investment from prosperous coastal cities into the vast, undeveloped hinterland, the reports said.

Chinese leaders also plan to step up energy conservation, it said.