III. Major Tasks and Measures for Economic and Social Development in 2008
This year is the first year for implementing the guidelines adopted at the Seventeenth Party Congress, the 30th anniversary of the reform and opening up policy and the year of the Beijing Olympic Games. It is also of special significance as a year that comes at the midpoint of the Eleventh Five-Year Plan for National Economic and Social Development. In order to smoothly attain the targets for economic and social development, we must take all factors into consideration, make our priorities clear and focus on the following eight areas.
1. We will improve and implement macroeconomic regulatory policies to maintain the good trend of steady and fast economic development.
Our primary task in macroeconomic economic regulation is to prevent rapid economic growth from becoming overheated and structural price rises from turning into marked inflation. We must work for steady economic development while giving top priority to realizing sound development. We must carefully review regulatory policy measures and adjust them as needed to address conspicuous problems and potential risks in economic development by determining the appropriate orientation, intensity and pace of regulation, taking into account both long-term and short-term needs and addressing both the symptoms and root causes of problems to build on the results of macroeconomic regulation.
We will follow a prudent fiscal policy and a tight monetary policy.
1) The budget deficit and volume of long-term treasury bonds issued to fund development will be further reduced. The proposed central budget deficit for 2008 is 180 billion yuan, 65 billion yuan less than the previous year. We plan to issue 30 billion yuan of long-term treasury bonds, which is 20 billion yuan less than last year. Investment in regular development projects from the central budget will be increased by an appropriate amount, bringing the total central government investment in development projects to 152.1 billion yuan.
2) Central government allocations for development projects will be appropriately distributed, with the focus on supporting improvement in working and living conditions in rural areas, energy conservation and pollution reduction, ecological and environmental conservation, independent innovation, social programs and follow-up development for large infrastructure projects. We will continue to ensure that more investment goes to the western region than other regions.
3) We will control the money supply and curb excessive growth of credit. We will employ a full range of monetary policy instruments, including interest rates, open market operations, required reserve ratios and "window guidance," and give play to the role of special treasury bonds and notes in draining excess liquidity. Government financing must be kept at a reasonable level and direct financing should be kept at an appropriate rate. In particular, the scale of general purpose funding should be strictly controlled.