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Pronounced Macro-control Effect with a Steadily Booming Economy: A Macro-control Policy Aimed at Stabilizing Economic Growth and Market Prices for Next Year


Task Force on Analysis of Economic Performance in 2009 and Prospects for 2010

Since 2009, under the severe impact of the international financial crisis, the Chinese Communist Party Central Committee and the State Council have come up with a package of economic stimulus plans at the right time and the economic growth has been continually going up since its preliminary turn for the better in the second quarter. With the acceleration of the market-driven investment and the consumption growth, the stability and the sustainability of the economic performance have been gradually enhanced and a marked effect has been produced in terms of maintaining economic growth. It is predicted that the economic growth rate for the whole year will be slightly higher than 8%. With the economic recession taking place in most of the world major economies, such an achievement has been hard-earned and is the best gift to the 60th anniversary of the founding of the People's Republic of China. In 2010, it is likely that the economic performance would maintain a steady growth on the basis of 2009. However, there is a great pressure from the excessively fast rise in asset and commodity prices and the risks arising from the investment and the export fluctuations still exist. Therefore, it is suggested that a macro-control policy aimed at stabilizing economic growth and market prices should be adopted and, meanwhile, we should accelerate the reform in the key fields, make full use of the underlying opportunities in the crisis, make substantial progress in the change of the development patterns and in structural adjustment and lay a good foundation for the sound, rapid and sustainable development of the economy over a long period of time in the future.

I. Improved Stability and Sustainability Related to Economic Recovery

Since 2009, the policy effect of the package economic stimulus plans of the government has gradually loomed up. After touching the trough of business cycle in the first quarter, the economic performance began to show an upswing. After the export downturn being successfully replaced by the growth of government investment, which is known as the "first replacement", the "second replacement", with the market-driven business investment and household consumption being as the dominant factor for economic growth, has gradually come into being after the expansion effect of the government investment diminished. The recent data have shown that the momentum of the "second replacement" has been strengthened and the number of positive factors in the economic performance has increased.

1. Investment has been growing continuously and rapidly

From January to August, the urban fixed asset investment increased by 33%, year on year. Over five months' time, the investment growth rate has always remained above 30%, of which the additional increment has accounted for 60%-70%. By industry, except for the industries enjoying intensified government investment, the market-driven investment in the real estate and auto industries, two leading industries, has accelerated as well. The investment in real estate development increased from 1% in January and February to 34.6% in August as compared with the same period of the previous year. From January to August, the output and sales of automobiles reached an accumulative total of 8.25 million and 8.33 million, respectively, up by 26.6% and 29.2% from a year earlier, and fuelled the growth of investment in auto industry and other related industries. By system of ownership, except for the investment in state-owned enterprises increasing by 49.7%, the investment in self-employment businesses increased by 34% and the investment in foreign-invested enterprises was gradually recovering. In August, the foreign investment utilized by China increased by 7% from a year ago, which was the positive growth appearing for the first time since the outbreak of the financial crisis in September 2008.

2. Consumption growth has hit an all-time high

During the first eight months, the total volume of retail sales of social consumer goods increased by 15.1%, year on year. Of this increase, the retail sales increased by 15%, 15.2% and 15.4% respectively from June to August, after allowing for the price rise, the actual increase recorded an all-time high. The rural consumption has highlighted the policy effect. The consumption in counties and in localities under the county level grew by 16.1%, being 1.5 percentage points higher than that in places at the municipal level. By category, except for such consumer goods as automobiles and home electrical appliances that are at the mercy of policies, consumption of furniture and hardware continued to grow. The above-norm wholesale and retail sales volumes grew by 21.5%, year on year. The organic combination of high savings of the Chinese residents and the features in the upgrading of the consumption structure with the low prices and the stimulus policies prevailing in 2009 has jointly facilitated the steady growth of consumption.

3. Export downturn has been narrowed and international market share has been increased

From January to August, the total import-export volume dropped by 22.4%, shrinking by 1 percentage point as compared with the first half of the year. The export volume all exceeded 100 billion US dollars in July and August respectively. Through seasonal adjustment, the export ratio increased by 3.4% in August month on month and, due to the higher base in the previous year, the ratio saw a negative increase of 23.4% from a year earlier. The export price index reduced from 102.3 in January to 90.7 in August. The reduction of the quantity of goods exported was obviously lower than that of the magnitude of value. At the same time, the reduction of exports from the world major economies surpassed that of China. The market share of China's exports to its main trade partners went up. According to statistics by the importing countries, during the first half of 2009, the proportion of China-made products in the total imports of the United States, Japan and the European Union registered 18.7%, 22.3% and 17.5%, respectively, being respectively 2.6, 3.5 and 1.5 percentage points higher than in the end of 2008.

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