Economist Yao Jingyuan with the National Bureau of Statistics (NBS) said on March 31 that there still exist three major prominent problems in China's economic operation in 2005, namely, the problem regarding farmers' income, the problem concerning the possibility of a rebound on fixed asset investment, as well as the problem about increased restriction imposed by resources and environment on economic growth.

Yao Jingyuan made the remarks at the forum held in Beijing on the development of China's machine-building industry. He said that China's total grain output last year stood at 938.9 billion jin (one jin=0.5 kg), an increase of 77.5 billion jin, per-mu (15 mu=one hectare) yield rose by 38 jin. Per-capita net income for farmers in the whole year reached 2,936 yuan, up 314 yuan year-on-year, or a 6.8 percent real increase, setting the best records in seven years. In 2005, the central government will intensify efforts for supporting farmers, the countryside and agriculture, which has further boosted farmers' enthusiasm for grain production. However, due to rich grain harvest reaped last year, grain price has been in the high growth stage, so it is impossible for grain price in 2005 to stand at a rate of 26.4 percent growth as in 2004, additionally, due to uncertain climatic factors, the problem of farmers' income is likely to face greater difficulty than that of last year.

According to Yao Jingyuan, deep-seated problems of the expansion of fixed asset investment resulted from the system for assessing the achievements of local governments, the calculation of gross domestic product (GDP), the image-shaping project, and redundant construction have not been resolved, the possibility of a rebound still exists if and when the growth rate of investment is too high in 2005.

Based on his analysis, Yao holds that the problems of resources and environment will still hamper economic development in 2005. At present, China depends on the international market for over one half of crude oil it needs, and yet international oil price continues to climb. In 2004 China consumed nearly 300 million tons of petroleum, the GDP China created can be converted into US$160 million, while American GDP stood at US$10 trillion in the same year. China's domestic generating installed capacity has surpassed the total installed capacity of Japan, but Tokyo's GDP has been well over US$4 trillion, more than 3 times that of China. In view of that situation, China must get rid of the state of an extensive and irrational structure in its economic growth and follow the road to sustainable development.

By People's Daily Online