Seize the opportunity to solve temporary and permanent issues, editorial

The following is a translation of the full text of the fourth article by People's Daily Commentator on further implementing the policy of the CPC Central Committee for strengthening macro-economic regulation and control. It was published on the front page of this leading newspaper, June 24, 2004.

The current Chinese economic situation is good as the whole, results have been achieved in macro-control. At the same time, it should be noticed that some contradictions and problems existing in economic operation remain rather striking. Fundamentally speaking, these contradictions and problems are issues concerning structure, system and the mode of growth. Therefore, taking the strengthening of macro-control as the opportunity to further accelerate structural adjustment, deepen economic system reform and speed up transformation of the mode of economic growth not only is the essential requirement of the socialist market economy, but also is the actual need for implementing the CPC Central Committee's policy on strengthening macro-control.

The sharp contradictions in economic operation are manifested mainly in the high rate of investment growth, the rapid growth of loans for capital construction, the strained relationship in the supply and demand of coal, electricity, oil and transportation, the great pressure caused by the rise in the general level of price, as well as in the aggregate of grain supply and demand and the composition of varieties. One important reason for this is that our structure, system and mode of growth fail to meet the demand of development of productive forces, especially the development of advanced productive forces.

From the perspective of system, of course there are many reasons for the too rapid investment growth in some industries and regions, but it also has much to do with the defects of our current economic system, for instance, under the incomplete investment system, some local governments take enterprise investment decision-making into their own hands while failing to restrain governmental investment; financial system reform has not been truly in place, some banks have the motivation of loan expansion, but they lack a risk constrained mechanism; the land management system is not perfect enough, the transformation of government functions has not been put in place--these have, to certain extents, adversely affected economic vigor and efficiency; from the perspective of structure, "investment is stressed, and consumption is neglected", the proportion of service trade is low, the dualistic urban and rural structure is evident, the imbalanced development between eastern and western regions remains a universal phenomenon; from the perspective of growth method, the tendency of pursuing speed and largeness in violation of the objective law still exists in many places, unrealistic comparing and disordered competition have resulted in a large amount of low-level copy-cat construction and waste of resources.

Without truly solving the problems relating to structure, system and the growth method, it would be impossible to fundamentally eliminate the tendency of blind expansion of investment and one-sided pursuit of growth speed, and to prevent the reappearance of factors of unwholesomeness and instability in economic development.

To strengthen macro-control, it is necessary to both grasp the current outstanding contradiction and implement the Party Central Committee's various control measures to the letter, and to seize opportunities to fundamentally solve problems regarding structure, system and the mode of growth in economic development; it is necessary to adhere to market orientation and give greater play to the role of the market in the allocation of resources, and to make comprehensive use of economic, legal and administrative means and a variety of policy tools, on the basis of exercising proper control of aggregate, major efforts should be devoted to pushing forward structural adjustment, system reform and transformation of the mode of economic growth.

Along with the entry of the Chinese economy into a period of rapid growth and with the approach of the end of the transition period of China's accession to the WTO, it is imperative to tighten macro-control and form a policy for seeking permanent solution of problems, it appears to be especially urgent to improve efficiency through deepening reform and optimizing structure, and to enhance the competitiveness of China's economy as a whole. We should take the ongoing macro-control as an opportunity to deepen reform and vigorously propel structural adjustment and transformation of the method of economic growth.

The various regions should proceed from reality to make their structural adjustment have their own characteristics. It is necessary to persistently follow the road leading to new-type industrialization, actively develop high and new technological industries and the tertiary sector; resolutely control projects that have low technological content, consume huge amounts of resources, cause serious pollution and do not meet the requirement of structural adjustment; we should continue to increase input, give all-out support to agriculture and rural economic development; we should give more support to projects such as environment protection, science and technology and education, and medicine and health, to projects such as communications, energy sources and other weak links which are in urgent need to be strengthened, as well as projects which are conducive to raising the general technical level of industries and upgrading products; in the process of advancing industrialization and urbanization, we should correctly handle the relations between economic development and the bearing capacity of the resources environment and pay attention to properly coordinating urban and rural relationship, the relationship of regional development, the proportionate relationship of investment and consumption, etc. We should earnestly change the traditional and extensive method of economic growth, speed up enterprise technological renovation and the optimization and upgrading of industrial structure, vigorously economize on resources and persist in the unity between speed, structure, quality and efficiency.

We should lose no time in continuing to advance various reforms, including reforms of investment, banking, finance and taxation and the land and food circulation systems, as well as reforms in the aspects of State-owned enterprises, social security and administrative management systems, among these reforms, it is particularly necessary to speed up the change of government functions and truly shift government functions in economic management on to mainly serving the market as the mainstay and creating a good environment for development.

At present, China's economic operation is developing in the direction of realizing the anticipated goal of regulation and control, internal and external situations are generally favorable to China's economic development. We should seize and value the opportunity, make use of the new train of thought, new mechanisms and new methods and transform the various macro-control measures into a powerful driving force for solving deep-seated problems regarding structure, system and the mode of growth, so as to achieve greater and better results in macro-control and maintain a sustained, rapid, coordinated and sound development of the economy.

By People's Daily Online