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China pledges stable economic policies
Updated: 2004-12-05 23:01

Chinese leaders closed a key economic meeting on Sunday with pledges to maintain stable fiscal and monetary policies in 2005 and keep a tight lid on fixed-asset investment.

Chinese President Hu Jintao addresses during a central economic conference in Beijing Dec. 3, 2004. The three-day annual conference closed Sunday. [Xinhua]

"We will implement stable monetary and fiscal policies and continue to contain excessively rapid growth in fixed asset investment," state radio said, citing an announcement after the closing of the annual Central Economic Work Conference.

The three-day annual conference, which closed Sunday, was attended by all nine members of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee. It summed up the economic situation this year and planned for 2005.

"The macro-economic controls are timely and effective," said the announcement.

The government's macro-economic policies have helped restrain some unhealthy factors and avoid drastic ups and downs in China's economic development, it added.

The government would "pay more attention to the use of market and legal measures" in guiding the economy and set "reasonable" growth targets for 2005, it said.

The government would narrow the gap between cities and the countryside and guide the country's rapid urbanization process.

The government would implement a stable fiscal policy next year, marking a final departure from the pro-active policy that has been in place since the 1997-98 Asian financial crisis.

The closed-door meeting was chaired by President Hu Jintao and Premier Wen Jiabao.

Meanwhile, the conference spoke highly of the central authorities' decision to strengthen and improve macro-control, which contributed to the persistence of a sound economy this year.

Statistics show that China's gross domestic product (GDP) reached 9.3 trillion yuan (US$1.1 trillion) in the first three quarters of this year, a 9.5 percent year-on-year rise. The increase of the consumer price index (CPI), a key barometer of inflation, dropped nearly one percent month-on-month to 4.3 percent in October.

The conference revealed that a crucial turning point has emerged in China's grain production leading to a great increase in farmers' income.

The grain output is expected to reach 455 billion kilograms by the end of this year, a sharp contrast to four years of falling yields. The per capita cash income of farmers amounted to 2,110 yuan (US$255) in the first three quarters, up 11.4 percent year-on-year, recording the highest jump since 1997.

According to the conference, over-investment in some industries have been curbed effectively and weak sectors have been strengthened, thanks to the government's macro-economic control policy.

Statistics also show that China's investment in fixed assets totaled 4.5 trillion yuan (US$544 billion) by September this year, up 27.7 percent year-on-year, but down 15.3 percentage points and 0.9 percentage points, respectively, when compared with the growth rates of the first quarter of this year and the first half of 2004.

China has also witnessed an evident slowdown of the investment in some over-heated sectors, such as the steel, cement, aluminum and real estate. Stricter control over loans and land use is believed to have played an important role in holding back the over-hike in investment.

The conference also applauded the continuous rise in economic benefits, large increase in fiscal revenue and enterprise profits, as well as new progress in employment and re-employment work.

China realized a fiscal revenue of 420 billion yuan (US$50.7 billion) in the first three quarters of this year. The industrial enterprises reported a total profit of 913.3 billion yuan (US$11.2 billion) from January to October, a 39.7 percent year-on-year rise. The country's import and export value is also expected to exceed 1 trillion US dollars, placing it third in global trade.

The conference scored the government's macro-control policies and measures over the past year as "timely, accurate and effective" under the guidance of the scientific viewpoint of development. But it also warned that some deep-rooted problems hindering healthy growth of the economy remain unsolved..

The conference called for further efforts in handling the relationship between the market mechanism and macro-control, optimizing the economic structure, promoting the coordinated development and improving related systems and mechanisms.

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