In 2003, the Chinese economy reached the peak in the short cyclical swings. Therefore it is expected to see a period of contraction in the cycle in 2004 with a minor decline in the growth rate, which is likely to be about 8.7% in the first quarter, and reach an average rate of around 8.4% throughout the year.

The new phase of economic growth (in China) was set off after the economy entered the current stage, where the sources of growth (including both supply and demand), the drives (heavy industry and chemical industry as leading sectors), and the mechanism (market orientation) all differ from previous growth pattern.

Based on the achievement and experience in terms of the national economic layout and structure adjustment, the paper makes an analysis of the tangible issues in the national economic layout and structure adjustment as well the in-depth reasons constraining adjustment, and raises the following policy suggestions.

In 2002, the People's Bank of China continued to implement the moderate monetary policy and improve financial supervision and service.

At present, China's economic performance is as follows: the short-term fluctuation of stock investment is in the period of expansion, the short- and mid-term fluctuation of fixed asset investment growth is in the period of expansion, the mid-term fluctuation of industrial structure upgrading is in the period of recession and its mid- and long-term fluctuation is in the period of recovery.

That investment rate is continuously rising and consuming rate is continuously falling is the general rule of the economic structural evolvement in the course of the industrialization.

Although the interest rate of China is low, it can not create liquidity trap in short run.