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General thoughts on China's economic and social development

By Han Wenxiu
0 Comment(s)Print E-mail China.org.cn, April 4, 2012
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To adopt a holistic approach, and coordinate key tasks

The arduous tasks for economic and social development in the year 2012 cover many areas, and can be summarized as follows: To coordinate efforts to achieve steady growth, control prices, adjust the economic structure, improve the people's wellbeing, implement reform, and promote harmony.

- Achieving steady growth

Influenced by knock-on effects of the continuing international financial crisis, China's economic growth showed a quarterly slowdown in 2011, and the contribution rate of external demand to its economic growth was -5.8 percent. It is, therefore, more important, and more pressing, to ensure steady growth. However, China is still in an important period of strategic development opportunities, and conditions are still favorable for China's continued robust economic development. It is crucial that the government exploit these conditions to overcome existing difficulties, continue to strengthen and improve macro-controls, promptly resolve emerging issues that signal unfavorable trends, and achieve stable and relatively rapid economic growth.

The expansion of domestic demand is the key factor in achieving steady growth. It's important to improve consumption policies, expand consumption fields, optimize the consumption environment and increase consumers' ability and willingness to consume. The focus should be placed on ensuring and improving people's wellbeing, boosting the development of the service industry, expanding the proportion of middle-income groups and developing a permanent mechanism for expanding domestic demand. Great efforts should be made to advance urbanization, make basic public services equally accessible to migrant workers in large cities, register them as permanent residents in medium and small cities, and unleash their consumption potential. The government should fully implement relevant policies to stimulate the sound development of nongovernmental investment, which will ensure the steady growth of investment. Great importance should also be attached to the critical role played by external demand in helping to achieve steady growth and promote employment.

- Controlling prices

Last year, maintaining basic overall price stability was our priority in terms of macro-control. We took comprehensive measures to effectively restrain excessive price increases. However, the reasons behind the price hike are still exerting their effects. These reasons include inflationary pressure, rapidly rising food and housing prices, the increasing costs of labor and land, and necessary improvements of environment. We should also focus on managing expectations regarding inflation, take various measures to control prices, and maintain overall price stability. We must ensure the supply of farm products, especially food, in order to balance supply and demand. We must also boost distribution and reduce excessive distribution costs; regulate house property rental market; control prices and strengthen price administration.

- Adjusting the economic structure

We should further adjust the economic structure, boost the rapid and sound development of strategic emerging industries, enhance the overall capability of the service industry, and promote the optimization and upgrading of the traditional industries. We should ensure that significant progress is made with regard to energy conservation, emission reduction and environmental protection, and we must also improve our ability to ensure sustainable development. In addition, we face a number of further challenges. These include: increasing the role played by technology in terms of leading and supporting economic and social development; implementing the comprehensive strategy for regional development and the plan for developing functional zones to better coordinate development among regions, and proceeding with the process of urbanization.

- Improving people's wellbeing

This year, our work will once again focus on ensuring and improving people's wellbeing, increasing the government's input, and bringing substantive benefits to people on employment, education, medical care, housing, and social security. We will ensure that help and support for those in need is increased. We will accelerate work on improvements to the basic public service system, carry forward the reforms of the income distribution system, and give higher priority to promoting social fairness and justice.

- Implementing reform

We made the decision to implement the policy of reform and opening up, and this was undoubtedly the correct decision for China's destiny and future. We should promote the reform and opening up with greater resolve and courage, to further free up and encourage the forces of social productivity. We should seize all opportunities to promote reforms in important areas and key linked areas such as fiscal, taxation and financial systems, resources and environment, income distribution and social programs. We should summarize the grassroots experience and allow local communities to innovate and explore new possibilities. We should ensure that the decision-making process is more reasonable, improve the coordination of reform measures, and introduce a more powerful institutional system to accelerate the transformation of the pattern of economic development

- Promoting harmony

We are now still in a period of development opportunities as well as contradictions. The tasks of promoting steady and robust economic development and maintaining social harmony and stability are very challenging. We must manage the relationship between reform, development and stability; remove the negative factors which may impact upon economic stability and social harmony; actively yet prudently reduce existing risks in local government debt and private loans; undertake thorough research on how best to obey the law of economic and social development, make plans which ensure that development is the top priority, and that stability is maintained; strengthen and make innovations in social administration, work hard to resolve social conflicts and potential problems, and promote social stability and harmony.

We must coordinate efforts to achieve steady growth, control prices, adjust the economic structure, improve people's wellbeing, implement reform and promote harmony, so as to achieve our expected goals and realize the various targets of economic and social development.

To continue to strengthen the foundation of the real economy

The breaking away of the fictitious economy from the real economy and the excessive hyping of assets will serve to influence economic development, widen the gap between the rich and the poor and increase economic and financial risks as well as social risks. The global financial crisis has given us a clear illustration of how this can happen. Therefore, we should properly deal with the relationship between the real economy and the fictitious economy, and regard the development of the real economy as the foundation on which our efforts are built. .

More market factors, especially talents and funds, should be transferred to the real economy. Government policy should be more favorable to the development of the real economy. The burdens on enterprises, especially small and micro businesses, should be reduced. In addition, we should continuously improve government service, further open up market access, facilitate nongovernmental investments, and create a favorable environment for the development of the real economy.

We should also make full use of financial and taxation measures, both to encourage those engaged in businesses related to the real economy business and to reign in speculation, as well as facilitating the free flow and reasonable allocation of funds and other factors of production, and seek to ensure that the profits of all industries are equalized.

We should accelerate the transformation and upgrading of the real economy, work hard to promote emerging industries, upgrade the technologies of traditional industries, and ensure the long-term vitality of the real economy.

Moreover, we should give full reign to the role played by finance in economic development, deepen reform of the financial systems, accelerate financial innovation, and ensure that, overall, finance works to better serve the real economy.

The author is vice director of the Research Office of the State Council.

(The article was written in Chinese and translated by Xu Lin and Zhang Junmian.)

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.

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