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Thursday, January 19, 2012

Chinese Ambassador to The Bahamas - Hu Shan on China’s economic work in 2012

China’s economic work in 2012

Making progress while maintaining stability

By Hu Shan
Chinese Ambassador to The Bahamas

In recent months, many Bahamian friends have kept asking me about the future development situation of China’s economy, expecting me to introduce more of China’s economic policy through local media.  It so happened that China set the main tasks for its 2012 economic work last December, the tone of which was set as making progress while maintaining stability.  Following are some of the main contents.

China’s Central Economic Work Conference, concluded in Beijing on December 10, 2011, made an in-depth analysis on the major issues China must properly handle in 2012 and the ensuing period, and clearly pointed out the overall requirements, general guiding principles and main tasks of China’s economic work in 2012.  Concrete arrangements were laid out.

The conference holds the view that the world economy slowed down, the growth rate of international trade dropped, the international financial market intensively fluctuated, and risks of all sorts increased obviously in the past months in 2011.

Looking ahead, the overall situation of the world economy in 2012 will still be extremely complicated.  The instability and uncertainty of the world economy recovery is increasing.  China should pay more attention to both domestic and international situations, and figure out a due plan accordingly.  It should strengthen the awareness of risks and develop a full understanding of the challenges and opportunities brought by the international financial crisis.  From the perspectives of opening-up and reform as well as socialist construction of modernization, China should strengthen strategic planning and increase the capability of reaction by making best use of its advantages and bypassing its disadvantages.  It should continue to increase its comprehensive strength and international competence through exploiting favorable conditions while avoiding unfavorable ones.

China must play particularly well the basic work tone of maintaining stability while making progress when promoting its economic and social development in 2012.  ‘Stability’ means to maintain basically stable macroeconomic policies, relatively fast economic growth, stable consumer prices and social stability.  ‘Progress’ means to make new advances in transforming the economic development model, new breakthroughs in deepening reform and opening up and new achievements in improving people’s livelihood by seizing this strategically important development period for China’s development and putting it to good use.

The conference points out, under the circumstances of a complicated and rapidly changing international political and economic situation as well as the new situation and change in domestic economic development, China must continuously stick to the main theme of scientific development and the main policy direction of expediting transformation of its economic development model.  It must firmly keep the basic strategic point by expanding domestic demand, putting its emphasis on safeguarding and improving the life standards of the people, on accelerating the development of service sectors and on raising the proportion of the medium-income class.

China must firmly maintain the solid foundation of developing real economy.  The Chinese people must work hard to create an earnest and down-to-earth social atmosphere and get rich through diligent labor.  China must firmly stick to the dynamics of speeding up reform and renovation by seizing good opportunities to make some breakthroughs in leading fields and key segments.

The Chinese people should make special efforts to improve their abilities of initial innovation and continue to increase the abilities of epitomizing innovation and recreation through importing, absorbing and digesting foreign technologies.

They must firmly keep in mind the fundamental purpose of safeguarding and improving people’s livelihoods by allocating more financial budget, and earnestly carrying out some big and important livelihood-related events.  In doing so, they must lay stress on raising the inclusiveness of development.

The conference points out, 2011 was the first year of the 12th Five-Year period and the Chinese government and people implemented to the letter the 12th Five-Year Plan.  China enhanced and improved macroeconomic control and correctly handled the relations among stable and relatively fast economic development, economic structure adjustment and stagnation management.

China put more emphasis on solving prominent issues, consolidating and expanding its achievements in coping with international financial crisis.  China also made more efforts to enforce the orderly economic transformation from policy-stimulating to independent growth.  China’s national economy kept on moving towards the expected direction of macro-control, with a good momentum of relatively fast growth, stable price tendency, good returns, and improvement of people’s livelihoods.

In general, in 2011, China made new progress in socialist development in the fields of economy, politics, culture, society, conservation and party affairs, setting a favorable beginning for the 12th five-year period.

Given the extremely complicated domestic and international situations, no small effort was expended in obtaining such achievements.  That was the outcome of the dedication and hard work of the whole party and the whole nation in unity.  That was also the outcome of the unswerving efforts and tenacious striving of all the local governments and people from all walks of life.

The conference emphasizes that it must be consciously seen that, while the achievements were fully affirmed, currently the conflicts of interests and problems in China’s economic development remain prominent, say imbalanced, uncoordinated unharmonized development.

Moreover, there co-exists the heavy pressure of the decline in economic growth and the rising of commodity prices.  Some enterprises have difficulties in their production and management; the situation of energy conservation and emission reduction is still very severe; and there are potential risks that allow no negligence in the financial sector.

So the Chinese people must be sober-minded.  They should strengthen risk assessment, make contingency plans and take timely measures to effectively defuse all kinds of risks.

The conference clearly set the main tasks of China’s economic work for 2012. China should:

1. Continue to strengthen and improve macroeconomic adjustment and control, and promote the economy to gain stable and relatively fast growth.

2. Be unremittingly committed to the work of agriculture, rural areas and farmers, and secure the supply of agricultural products.

3. Accelerate economic structural adjustment, and promote independent and coordinated economic development.  First, it should make great efforts to expand domestic demand.  Second, it should forcefully push forward the optimization and upgrading of industrial structure.  Third, it should put more efforts on energy conservation and emission reduction.  Fourth, it should spare no efforts to promote regional coordinated development.

4. Deepen reform in major areas and key segments, and uplift the level of opening to the outside world.

5. Make full efforts to safeguard and improve people’s livelihoods, strengthen and innovate social management.

The conference points out, in order to do a good job in the economic work in 2012, China must stick to the concept of overall planning and all-round considerations, and earnestly keep a good balance between objectives and tasks to achieve the overall objective of making progress while maintaining stability.

The Chinese government should better combine stable growth, price control, structure adjustment, livelihood improvement, reform implementation and harmony promotion.

‘Stable growth’ means to boost domestic demand while stabilizing foreign demand, to exert itself to overcome the impact brought about by all sorts of unstable and uncertain factors, promptly solve trendy and tendentious problems, and to keep stable economic growth.

‘Price control’ means to continue taking comprehensive measures to keep the general price level basically stable and prevent the price tendency from rebounding.

‘Structure adjustment’ means to bring the main theme into bold relief, permeate the main policy into the whole work, combine support and control accordingly, increase both quality and quantity of economic growth, and to strengthen economic coordination and sustainability.

‘Livelihood improvement’ means to place safeguarding and improving of livelihoods on a more outstanding position, concentrate efforts to solve urgent issues, and to do some tangible things that can be seen by the people and can benefit the people.

‘Reform implementation’ means to push forward reform with greater commitment and efforts, concentrate all efforts to solve systematic and structural contradictory problems that directly impact the long-term healthy economic development, obtain new breakthroughs in major areas and key links, and promote reform, development and harmony through opening-up.

‘Harmony promotion’ means to correctly handle the relations among reform, development and stability, actively and efficiently defuse all kinds of potential conflicts and risks, and promote social harmony and stability.

Jan 19, 2012