Ma Kai: Sizzling economy to be controlled
In the coming year, China will have to rein in sizzling economic growth, create more jobs, keep tabs on inflation and curb the pace of rapidly swelling foreign trade in a bid to achieve balanced progress, said the country's development design czar.
However, it is necessary to rein in sizzling economic growth though a minimum economic growth rate of 7 per cent is needed this year in order to keep the urban registered jobless rate below 4.7 per cent, he told deputies at the 10th National People's Congress (NPC) which ends Sunday.
Most strikingly, China, the world's fifth largest trading power, slowed down its foreign trade growth rate to 8 per cent from 37.1 per cent in 2003, in which total foreign trade volume had swollen to US$851.2 billion. Foreign trade, the main engine driving the economy, has maintained double digit growth for many years.
Sketching out other economic targets, Ma said China would work to "perfect the exchange rate mechanism" of the yuan while keeping the currency at a "rational and balanced level."
China has set a target of 9 million new urban jobs and an official jobless rate of about 4.7 per cent this year. That compares to 4.3 per cent last year and would be the latest in a series of rises. China's unemployment data counts only urban joblessness among people who have registered with authorities.
If laid-off and rural surplus workers are considered, the jobless rate may double.
Some economists have been ringing alarm bells that the world's sixth largest economy may already see signs of inflation. In response, the country is determined to put the brakes on fast-growing investment to curb the annual rise of the consumer price index (CPI) to 3 per cent in 2004. The CPI, another major gauge of an economy's inflation, rose by about 1.2 per cent last year.
China aims to cap growth of the broad money supply at around 17 per cent, a move aimed at stopping a flood of money that helped push annual inflation to 3.2 per cent in January, the highest level in nearly seven years.
Ma Kai said the government will control the issuance of over-extended loans and try to cool down some overheated sectors, including steel, cement and real estate.
Ma also forecasted a US$38.6 billion budget deficit this year as the government shifts resources to help the vast countryside catch up with wealthier cities.
Ma said the widening wealth gap caused as cities and coastal areas race ahead of the hinterland could spark social unrest and undermine the government's authority over the country's 1.3 billion people.
Ma's concern echoed Premier Wen Jiabao who opened the NPC session last Friday and vowed to cool off the economy and help hundreds of millions of farmers who are angry at stagnant living standards, corruption and a lack of basic services.