China's 2006 Central Economic Work Conference closed recently in Beijing, drawing up major economic strategies and policies for 2007. The meeting has called for the continuance of efforts to strengthen and improve the country's macro-control policies. Experts say that the key to healthier economic development for the country is to restructure industry, and encourage consumption and balance international payments. Wu Jia has more .
 Economists believe that a major problem with China's economic development at present is the imbalance between savings and consumption. In the first three quarters of 2006, savings accounted for almost 50% of the country's economic development, while consumption only took up less than 36%. The Economic Work Conference has stressed the need for macro-control policy to stimulate domestic consumption in accordance with savings next year, especially among rural people. More employment opportunities will be built up in the countryside, to steadily increase the proportion of mid-income groups.
Ma Xiaohe is vice-director of the Academy of Macroeconomic Research with the State Development and Reform Commission. He believes expanding consumption among farmers and speeding up the development of public services in rural areas are essential.
“At present, the difference between urban and rural areas can be reflected mainly by the construction of infrastructure. There is still a lot to be done to improve the roads, water, electricity and gas supply and telecommunications in the countryside. This would significantly reduce the basic costs of living there.”
The conference has also proposed a slow down of the country's rapid investment growth. Zhao Xijun, a professor at Renmin University, says proper policies on finance and currency would help.
“The Bank of China should keep a close eye on providing loans, particularly with the imbalanced international payments. More action, such as responding promptly to adjusting things like the deposit reserve ratio, interest rates and the short-term loaning policy are also needed.”
China's trade surplus reached 157 billion USD in the first eleven months of this year, exceeding 66 billion USD over the same period last year. This has led to foreign exchange reserves totaling 1 trillion USD, second to none in the world.
Cheng Dawei, an expert in international trade at Renmin University, says the growing trade surplus has led to frequent trade friction and also an increase in pressure for the appreciation of Renminbi.
“We should use proper international trade policy to encourage bringing in certain industries, like advanced technologies. We should also promote imports. Import those products that are good for our technological innovation, to help restructure our economy.”
Experts also suggest that when it comes to policymaking, more consideration should be paid to increasing the usage rate of resources, cutting down environmental pollution and creating more social security.
Wu Jia, CRI News.
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