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Full Text: China's economic, social development plan
Posted: March-21-2008Adjust font size:

III. Major Tasks and Measures for Economic and Social Development in 2008

This year is the first year for implementing the guidelines adopted at the Seventeenth Party Congress, the 30th anniversary of the reform and opening up policy and the year of the Beijing Olympic Games. It is also of special significance as a year that comes at the midpoint of the Eleventh Five-Year Plan for National Economic and Social Development. In order to smoothly attain the targets for economic and social development, we must take all factors into consideration, make our priorities clear and focus on the following eight areas.

1. We will improve and implement macroeconomic regulatory policies to maintain the good trend of steady and fast economic development.

Our primary task in macroeconomic economic regulation is to prevent rapid economic growth from becoming overheated and structural price rises from turning into marked inflation. We must work for steady economic development while giving top priority to realizing sound development. We must carefully review regulatory policy measures and adjust them as needed to address conspicuous problems and potential risks in economic development by determining the appropriate orientation, intensity and pace of regulation, taking into account both long-term and short-term needs and addressing both the symptoms and root causes of problems to build on the results of macroeconomic regulation.

We will follow a prudent fiscal policy and a tight monetary policy.

1) The budget deficit and volume of long-term treasury bonds issued to fund development will be further reduced. The proposed central budget deficit for 2008 is 180 billion yuan, 65 billion yuan less than the previous year. We plan to issue 30 billion yuan of long-term treasury bonds, which is 20 billion yuan less than last year. Investment in regular development projects from the central budget will be increased by an appropriate amount, bringing the total central government investment in development projects to 152.1 billion yuan.

2) Central government allocations for development projects will be appropriately distributed, with the focus on supporting improvement in working and living conditions in rural areas, energy conservation and pollution reduction, ecological and environmental conservation, independent innovation, social programs and follow-up development for large infrastructure projects. We will continue to ensure that more investment goes to the western region than other regions.

3) We will control the money supply and curb excessive growth of credit. We will employ a full range of monetary policy instruments, including interest rates, open market operations, required reserve ratios and "window guidance," and give play to the role of special treasury bonds and notes in draining excess liquidity. Government financing must be kept at a reasonable level and direct financing should be kept at an appropriate rate. In particular, the scale of general purpose funding should be strictly controlled.

4) Intensive efforts will be made to improve the loan structure. We will actively guide and encourage commercial banks to increase lending for agriculture, farmers and rural areas, the service sector, small and medium-sized enterprises, independent innovation, energy conservation, environmental protection, balanced regional development and expansion of employment. The volume of mid- and long-term loans will be controlled. In particular, financing for projects that are energy intensive and highly polluting and for poorly performing companies in industries with excess production capacity will be strictly controlled.

5) We will continue to deepen the reform of the foreign exchange management system and expand channels and means for using foreign exchange reserves.

6) Coordination and information sharing between macroeconomic regulatory authorities and banking regulatory authorities will be enhanced to guard against and reduce financial risks. The broad money supply (M2) should increase by about 16% in 2008.

We will continue to rein in the excessive growth of fixed asset investment.

1) New projects will be strictly scrutinized. Requirements will be instituted to improve and standardize the management of new projects, and we will ensure that the eight specified conditions are strictly met for each new project. Construction projects that violate laws and regulations must be resolutely cancelled or suspended. We will strictly control the use of budgetary funds to finance office buildings for Party and government organs. Nevertheless, we need to judge each case on its own merits, encouraging some and restricting others, and continue to increase support for weak links and priority areas in economic and social development.

2) Expansion of industries that are energy intensive and highly polluting will be strictly controlled. The list of government-approved investment projects will be revised and management will be tightened for projects in industries that are energy intensive, highly polluting and have excess production capacity. The required proportion of upfront capital for certain types of projects will be increased and standards for project approval in terms of technology, environmental impact, energy consumption and scale will be raised. We will prevent the relocation of backward production facilities and highly polluting projects from one region to another. We will encourage enterprises in energy-intensive and highly polluting industries to merge and reorganize so that the superior ones can prosper and the inferior ones be eliminated.

3) We will tighten overall management of investment projects. We will establish a sound mechanism for interdepartmental coordination in the management of new projects. We will continue to strictly review applications for land and credit and rigorously enforce market access standards. Approval to use land for construction purposes will be strictly controlled, particularly land for industrial purposes, to ensure that land is used in an economical and efficient way. The total amount of planned land use in 2008 will be kept at the same level as last year. Oversight and inspection of land use will be tightened. Project approval will be restricted in regions where the problem of illegal land use is widespread or there are serious pollution problems. Inspection of major construction projects, particularly those financed with government investment, will be enhanced, and oversight of the entire process will be tightened. We will do a good job in monitoring, forecasting and releasing information on total investment in society to properly guide non-government investment.

We will work to prevent excessively rapid increase in the overall level of prices.

1) Production and supply of basic necessities, including grain, edible oil, meat and other commodities, whose supply is tight, will be increased to ensure uninterrupted supply of such goods. We will continue effective implementation of the system of provincial governors assuming responsibility for the "rice bag" program and city mayors assuming responsibility for the "vegetable basket" program to increase the government's responsibility for ensuring an adequate supply of basic necessities and stabilizing consumer prices. We will strictly control the use of grain for industrial purposes and export of grain, and resolutely curb reckless expansion of the capacity for downstream corn processing. The reserve system will be improved and import of major consumer goods that are in short supply domestically will be increased appropriately.

2) We will strictly control the prices of commodities and services under government regulation. We must maintain an appropriate pace and intensity for government price regulation. There should be no price increases in the near future for items regulated by the central government such as refined petroleum, natural gas and electric power, for public utilities and services regulated by local governments such as electricity, gas, water, heating and public transport and for admission to tourist sites. We will not allow any rise in all tuition and boarding costs for schools at all levels and of all types and will continue to stabilize charges for medical care. Essential adjustments in the prices for resource products and public services will be tightly controlled to prevent price spirals.

3) Regulation of market prices will be strengthened. Temporary measures will be taken earnestly when needed to hold down the prices of some key basic necessities. We will continue to rigorously oversee and review educational charges, medical costs, telecommunications rates, prices of agricultural supplies and other charges and fees related to farmers. We will severely punish people who fabricate and spread price rise rumors, conspire to raise prices, hoard goods for speculation and engage in price gouging.

4) Market price surveillance will be strengthened. We will improve the surveillance and early warning system for supply and demand and price changes of bulk farm products, primary products and essential agricultural supplies. We will guide enterprises to be fair, lawful, honest and trustworthy in setting prices. We will work out contingency plans to address unusual fluctuations in market supply and prices.

5) We will improve and implement the assistance program for low-income people, and in particular, we will increase subsidies for people who are destitute and students from financially strapped families and ensure that they receive help promptly.

6) We will correctly guide public opinion to stabilize consumer expectations.

We will work hard to expand consumption demand.

1) Efforts will be made to increase consumption capacity. We will continue to increase the incomes of middle- and low-income people. We will establish a mechanism to ensure regular wage increases and regular payment of wages. Enterprises will be encouraged to set up a collective bargaining mechanism for wages. The system of suggested wage levels will be improved. The minimum wage system will be improved and strictly followed. Methods for managing SOE payrolls will be reformed and oversight for income distribution in monopoly industries will be tightened. We will protect the legitimate rights and interests of employees in strict accordance with the Law on Labor Contracts and other related laws and regulations. Beginning January 1, 2008, pensions for enterprise retirees will be raised again over the next three years. We will continue to do a good job standardizing and granting allowances and subsidies for public servants, and accelerate the reform of the wage system for public service institutions.

2) The consumption environment will be improved. We will improve the rural distribution infrastructure by improving the wholesale market system for farm products and the distribution network for agricultural supplies and modernizing the grain distribution chain. We will improve the system for making postal and telecommunications services more widely available. We will rigorously monitor the sanitation, quality and safety of all products, especially food and drugs. The requirements for obtaining approval to produce and market products with a potential impact on human health and safety will be raised. We will step up our efforts to build a system of product quality standards and guide and encourage enterprises to adopt international standards or advanced foreign standards.

3) Consumption of services will be stimulated. The price of admission to urban parks, museums, memorials and other public venues will be set at a low level or made free of charge. We will follow the plan to adjust national legal holidays and institute a system of paid vacations. We will continue to guide housing and car purchases to promote a reasonable level of consumption and stimulate consumption in the areas of telecommunications, culture, fitness and recreation. We will step up development of the tourism infrastructure in the old revolutionary bases and actively promote tourism in the countryside.

We will promote balance between supply and demand of coal, electricity, petroleum, transportation and major raw materials. We will improve the supply structure of coal, oil, power and transportation and coordination between upstream and downstream industries and among different regions. We will ensure adequate market supply during flood season, peak times in summer and winter, the Olympic Games and major holidays. We will improve demand-side management and raise the efficiency of energy use among end users.

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Source:Editor: Lydia
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