New Trend in Economic Development

By staff reporter JIAO FENG

THE 2013 Central Economic Work Conference, an annual tone-setting economic meeting attended by top Chinese leaders, listed six major tasks for 2014: ensuring food safety, industrial restructuring, controlling debt risks, promoting coordinated development between different regions, improving people’s livelihood and deepening reform and opening-up.

The keynote for 2014 economic work will be making progress while ensuring stability, reform and innovation.

Proactive Fiscal Policy and Prudent Monetary Policy

In the face of economic downward pressure and an uncertain world economy, China will maintain its proactive fiscal policy and prudent monetary policy in 2014.

“Maintaining policy and growth will create conditions for comprehensively deepening reform. The combination of proactive fiscal policy and prudent monetary policy is the optimum pairing under the current situation, which will not only encourage investment, but also curtail new risks as far as possible,” said Zhu Baoliang, director of the Economic Forecast Department, State Information Center.

According to Zhu, following a proactive fiscal policy means continuing to implement structural tax reduction, which will promote enterprise development. In addition, it means maintaining a proper scale of deficit, increasing investment in infrastructure and social welfare, and improving people’s livelihood. Prudent monetary policy will control the risk of inflation.

Deepening the Understanding of GDP

The conference stressed the need to fully understand the relationship between sustainable and healthy development and GDP growth, which does not simply evolve into an increase in the gross value of production. China should improve the quality of growth while avoiding side effects. With regard to the assessment of local Party and government officials, the conference emphasized strengthening education and assessment, thus minimizing improper conduct. Improvement in people’s living standards in poverty-stricken regions should be considered a key assessment criterion of local governments’ performance.

“China’s economy has entered a critical period of transformation and upgrading that requires a deeper understanding of GDP growth, achievable by performance assessment,” said Wang Jun, deputy director of the Consultancy and Research Department, China Center for International Economic Exchanges (CCIEE).

Wang believes that development comprises a lot more than just GDP growth; structural adjustment, improvement in people’s livelihoods, realizing social equality and justice, and protecting the environment are also development targets that can be achieved with a scientific government performance evaluation system.

Guarantee National Food Safety

China’s grain output exceeded 600 million tons in 2013, achieving a new record of successive increases over a decade. The conference made ensuring food security the nation’s top priority and emphasized that China should enhance its own ability and integrate domestic resources to achieve basic self-reliance in and the absolute safety of grain supply.

“Grain quotas are of great importance to guarantee normal life and basic economic order. They are necessary in order to ensure a higher degree of self-sufficiency. Moreover, from the point of economy and technology, it is feasible for China to maintain the comparative advantage of wheat and rice production,” said Ye Xingqing, director of the Research Department of Rural Economy, Development Research Center of the State Council.

Experts believe that to guarantee food security China must protect arable land from falling below the “red line of 1.8 billion mu,” strengthen agricultural infrastructure construction, boost scientific and technological progress in agriculture, promote moderate scale management and increase related subsidies.

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