Chinas Central Economic Work Conference Closes, Mapping Plans for 2007
China's 2006 Central Economic Work Conference was held in Beijing from December 5 to 7, with the drawing up of major economic strategies and policies for 2007.
The meeting drew out the general targets for the economy of the coming year, stressing that stable and rapid economic growth must be maintained, substantial achievement must be reached in shifting the growth pattern from extensive to intensive, and new measures must be taken to ensure the people's interests.
The conference made balancing international payments a major goal for 2007. Chinese leaders pledged to redouble efforts to vigorously expand imports and overseas investment, while maintaining rational export growth and use of foreign investment.
China's trade surplus reached 133.62 billion U.S. dollars in the first ten months this year, exceeding the 101.9 billion-U.S. dollars for the whole 2005. Having attracted more foreign investment than any other developing country for the 15th consecutive year, China is estimated to hold about one trillion U.S. dollars in foreign exchange reserves. The growing trade surplus has led to frequent trade friction, while the large international payments surplus has increased the pressure for the appreciation of Renminbi. Experts say too much foreign exchange has forced the central bank to issue more Renminbi, causing excessive fluidity in domestic financial markets.
The government would continue the strategy of "going global" by encouraging overseas investment, officials said. China's direct investment overseas neared 12.3 billion U.S. dollars last year, according to the 2006 World Investment Report by the United Nations. The government should increase export tax rates on primary resources like unprocessed steel, and encourage imports of technologies and resources.
Another focus of the conference was the country's low-income groups.
The conference delegates proposed to boost the income levels and consumption of rural people and the urban poor, calling for greater attention to creating employment opportunities. At the same time, the proportion of middle-income groups should steadily increase, while excessively high earnings should be effectively adjusted through taxation.
Data show the total consumption by the Chinese government and public accounted for 51.1 % of the country's GDP in the first three quarters, down from 62 percent in the 1980s. The proportion of public consumption in the GDP hit a record low last year, dropping to 38.2 % from 48.8 % in 1991. "The key to expanding domestic consumption is to stimulate consumption, especially among rural people, and speed up the development of public services in rural areas," said a scholar.
Too much of China's economic growth had been driven by trade and investment, which had increasing negative effects. China saw a 31.3 percent growth in urban fixed-asset investment in the first half of the year, the highest in the past three years. The government would continue to rein in investment and credit and tighten controls on the real estate sector.