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The Central Economic Work Conference (CEWC)
ended in Beijing on December 14.
It has proposed the overall tone of the economic work
next year to be "maintain stability and improvement," continue the prudent monetary and active fiscal policies.
The macro-control order was adjusted to "steady growth,
prices control, and structure adjustment."
Domestic and overseas experts think this is to ensure
the success of the 18th Congress Conference next year.
The Chinese authorities use "maintaining stability" to address
the dual pressure from economic slowdown and inflation.
In the decline of the global economy and sluggish U.S.
and European markets, China's economy is also suffering.
It has many problems, like manufacturing and export decline,
SME loan sharks, huge local governments debt, real estate bubble and high inflation.
Hu Jintao presided over the conference.
He admitted that China's current economic development
still has outstanding contradictions and problems that are unbalanced, uncoordinated and unsustainable.
The authorities want to stop the economy from "hard landing,"
and avoid social unrest due to inflation.
At the conference were discussed various economic issues.
For the "steady growth" it was decided
to expand domestic demand and stabilize external demand;
The handling of "prices control" issue
will require to prevent the price trend from rebounding.
The meeting also stressed about the need
to guard against potential risks in the economy.
Economics professor Chen Zhifei, City University of New York,
told NTD, the meeting did not show much optimism about the Chinese economy.
Prof. Chen: "The current economic situation is caused by
economic slowdown, inflation rise, domestic demand decline.
These problems can not be solved immediately
with the policies of the Chinese Communist Party (CCP).
The CCP needs to take special care. It is like walking
on a tightrope, it should be very mindful of the balance.
So it is with the use of the words "sound" or "positive"
in this area."
Reuters quoted economists' analyses, pointing out that,
"maintaining stability and improvement" policy shows they will continue to use the original rules.
However, the steady monetary policy is a little tight this year,
and will be loosened up next year, especially in some areas.
In November, China's money supply growth
was at its lowest level for over 10 years.
Ba Shusong, deputy director of Finance in State Council
Development Research Center, said the 2011 focus is to curb inflation.
And that in 2012 the emphasis might be on stabilization,
to assure there are no big ups and downs in the economy.
Beijing economist Feng Xingyuan has concerns the proactive
fiscal policy might lead China back to the way, "Nation moves forward, people move backward."
Feng Xingyuan: "The growth rate may decline next year.
The so-called active fiscal policy may also be linked to it.
Maintaining a growth with government consumption
and investment will cause some problems.
Like the say, "Nation moves forward, people move backward".
If large amounts are invested in state-owned enterprises,
when it comes to the quality of the entire economy, the quality of the economic structure, they will both decline."
CEWC proposed the fiscal policy that China should continue
structural tax cuts to promote economic restructuring;
it should strengthen fiscal and expenditure management,
and local governments debt management.
China's fiscal revenue this year will reach RMB 10 trillion;
the tax surpassed about 3 times the GDP growth.
Thus SMEs not only have heavy tax burden, but some even
ended up in closures, deteriorating the business environment of China's real economy.
Feng Xingyuan: "So if we really are to improve the economic
structure, the most important thing is the private investment and the business environment of private enterprises."
Chi Fulin, China Reform and Development Research Institute,
expressed concerns on the issue.
Chi said, the primary task of China's economic transformation
is stimulating consumption and expanding domestic demand.
To expand domestic demand and increase income
breakthroughs in the income distribution reform are needed.
The CEWC proposed an adherence to the real estate
regulatory policies and promotion of reasonable price return.
The meeting also noted, the pressure of economy downward
and price rising co-exist, and there are potential risks in economic and financial areas.
NTD reporters Chen Han, Li Yuanhan and Xiao Yan
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财经峰会：吴敬琏 Wu Jinglian: China's economic delimmaby caijingmagazine765 views
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