Qiu Xiaohua, deputy director-general of National Bureau of Stattistics (NBS), analyzed the reasons why the actual effect of China's fast growth is not satisfactory at the 6th meeting of the Standing Committee of the 10th CPPCC (Chinese People's Political Consultative Conference) National Committee.

Qiu Xiaohua offered three answers to his own question. First, there are problems in economic structure, operation mode and system. For example, there is no mechanism of survival of the fittest and many resources are dominated by companies with low efficiency. Second, enterprises seek self-circulation. They have a high level of wasting and are low in terms of tertiary industry. Third, while economic growth is fast stock is also very high. A great many products are stocked in warehouses to be transformed into actual wealth.

He also emphasized that there are following erroneous tendencies in China's economic development that must be corrected.

- A great deal of stored wealth is destroyed while seeking increment wealth. A typical case is the demolishment of old city zones and building of new city zones. What has just been dug is filled next day and what has just been filled is dug the day after. One percent of GDP is acquired at the expense of two percent of stored wealth.

- It is not clear whether the main body of wealth creation is the government or the people. In the past too much attention was paid to the government and state-owned economy with the use of the market and people's power being neglected, which led to low efficiency. Fore example, state-owned finance had a dominating role and multi-polar financial system was not established, which means stagnancy under tight policy and disorder under easy policy.

- Attention is paid only to wealth creation not to wealth distribution. Distribution relationship has not been straightened out and distribution means under the market system are not quite reasonable, which seriously dampens the initiative of the various sides. From 2000 China's Gini Coefficient has begun to exceed 0.4 - the international accepted alarm level.

One of the focal points that the Standing Committee of the CPPCC National Committee discussed on June 6 was how to optimize economic structure and change economic growth mode. Qiu Xiaohua believes when pushing ahead the change of economic mode system change should be an important precondition.

By People's Daily Online