China adopted policy to adjust its pace of economic growth for the firs time in 1979. Great changes have taken place since then. So the fifth round of macro-control under way distinguishes itself from the previous four.

The background against which the macro-control is launched

The former four rounds of macro-control campaigns before this one took place when the economy, expanding at a speed up to more than 11 percent, was overheating generally or in terms of gross quantum. They were targeting at severe inflation. In another word, it was the risk of strained economy that gave rise to the first four campaigns. They are passive reactions to economic problems.

The fifth round of macro-control, which is under way now, is a different story. In fact, in 2003, China��s economy grew 9.1 percent, well below 11 percent. The purpose of the campaign this time to prevent an unexpected sharp vertical ascension which may be followed by a nosedive of the economy. And the situation is nothing like a sweeping overheat or inflation of both investment and demand. The real picture is that overheating investment is confined in some sectors and the pressure of price hike is looming. The fifth campaign is underlain by the necessity of adjustment of some sizzling industries in-time and prompt, pre-emptive and preventive positive moves to safeguard the healthy and sustainable development of the economy as a whole.

On the different basis of economic system

China��s economy was undergoing changes in its system but the process was not completed basically during the previous four round of macro-control. The fifth round was the first foray into restrain-oriented macro-control since china has its socialist market economy take shape. The diversity of subjects of interest and the active various voices from the academic and media fields representing such a diversity have combined to add to the difficulty in the endeavor. A unified perception is always necessary but hard to achieve for each round of macro-control. And this is especially true for the fifth one.

Evolving methodologies and tools

For the first three macro-control campaigns, the policy was carried out in a real sense on a large scale only after one or two years of hesitation and ineffective implementation of the policy since it had been adopted. Drawing on this experience, the government pushed its decision on economic adjustment as hard as possible and as quickly as possible. The latest one, as a result of foresight and early action, has followed a progressive process which has gone through careful observation and mild warning before gathering momentum. The time, rhythm and the intensity of the adjustment are all deliberately weighed up and decisive measures are taken to identified problems.

Macro-control policies for the first three times were focused on administrative measures. Economic and legal tools, such as interest rate, deposit reserves, and open market business, began to play a role for the fourth macro-adjustment of the economy. Economic and legal leverages are prominent features for the fifth macro-control. Necessary administrative tools are also employed.

Ever-changing economic interaction with the rest of the world

The fifth round of macro-control has attracted much wider attention internationally than the previous rounds. From the concerns of the result of the macro-control this time has developed both optimism and pessimism among observers from overseas. The optimistic believe that the cooling down steps this time has laid a good foundation for a sustainable economic growth as actions have been taken more promptly than ten years ago. The pessimistic are worried about the possibility of a hard landing as a result of macro-control, which would lead to economic wobbling of the world, especially in China��s surrounding nations and regions.

By People's Daily Online