Statistics from the National Bureau of Statistics gave us a relief -- visiting foreign economists expressed their worry about a possible hard landing of China's economy.

The figures released by Zheng Jingping, spokesman of the bureau on July 16 indicate: a year-on-year GDP growth of 9.7 percent during the first half-year, a steady but rapid growth; fixed assets investment up by 28.6 percent as against the same period last year, witnessing 2.5 percentage points lower than the last year, and a decrease of 14.4 percentage points than the first quarter. Consumer price index (CPI), though 5 percent in June, is 0.7 percent lower than the previous figure.

As the spokesman said, all numbers show a fast and steady growth of the national economy, continuous rising economic benefit, mounting foreign trade and income of the nationals. The unstable and unhealthy factors in the economy are preliminarily curbed and the overall situation is tending towards the expectation of the macro control.

Since the launching of serial measures for macro control by the end of 2003, there has been great concern, both at home and abroad, over whether China could have a soft landing, let alone the capital market, a barometer of national economy. A drop since April made people much worried that there would be a hard landing in the capital market. Under the virtual economy, a soft landing under macro economy is sure to be queried by various sides.

Quite clear, the nation has drawn on lessons from the past when imposing macro controls, especially when it came to the specific problems for the control. The central bank, when making more efforts in monetary market and raising the deposit-reserve ratio twice, did not put forward stricter tightened monetary policy, but reigned hard the industries such as iron and steel, concrete and electrolytic aluminum, clear out the unregulated projects and capital, and that paid off.

In fact, those who are well informed of the national situation all know: it is the headstrong rush of local governments for a skyrocketing GDP that incurred overheated investment. Person in charge from the central bank warned many times: not to game with the central government is just a confirmation of the reason.

Administrative control is a must to cope with the overheated investment. It is a necessary choice for a market economy yet to be mature to deal with the problem. Practice proves, local overheated economy can be eased, for instance the high-handed measure imposed over the iron and steel works in Jiangsu, as the central government stresses scientific concept of development. In another perspective, the concept is a policy for solving the core problem. It is required to prevent such phenomenon from happening again, and to carry out scientific concept of development is an important guarantee.

The capital market immediately responded pleasing changes in macroeconomic statistics. The latest data boosted again the investors' confidence in the capital market. Although the CPI did reach five percent, an "alert line" to inflation, the spokesman's remark: "five percent, a sensitive number whose impact not necessarily to be exaggerated; no problem in China's economy or inflation", is indeed a circular disclose to hint that "no need to raise the interest" in the near future.

Marked achievement in macro control does not mean that a soft landing has been realized. It was noted at a regular meeting of the State Council on July 14 that the biggest conflicts in the economy still haven't been fundamentally tackled: fixed assets investment still swelled in scale, investment structure irrational, shortage in coal, power and oil supply remains yet to be relieved.

It was stressed at the meeting that, for the second half-year, the scientific concept of development must be earnestly carried out, the focus of work should be set on speeding up structural adjustment, deepening system reform and transforming the means of economic growth. More attention must be paid to the weak links in the social and economic development, to expanding consumption demand. However, to emphasize solving problems in economic lives through the market mechanism and economic and legal means will probably help turn gradually round the over-dependence on administrative measures as did in the past, and turn the economy toward a market economy.

By People's Daily Online