In response to the continuing economic slowdown, the Chinese
Government has made a series of moves to promote economic growth.
The central bank cut interest rates and lowered the deposit
reserves rate, while quickening the pace of examining and approving
basic construction projects and investing in programs supported by
central finance. These measures add new vigor and hope to the
acceleration of China's economy. The growth rate for 2012 is likely
to stay within a reasonable range of official predictions.
Debt crises in Europe have plagued the global economic recovery
and been a drag on China's export industry. Economic growth in
China has slowed for five quarters, and indications of an imminent
slump are on the rise.
China's leadership has put a renewed focus on maintaining
economic growth and preventing the inertia of a wider downturn. If
the economic growth rate continues to fall, it will not only affect
the government's fiscal revenues and expenses such as public
welfare, but also pose more difficulties to business operation due
to lack of sufficient demand. Businesses' losses will expand,
leading to more staff cuts and increasing strains on employment and
While adjusting economic structure, the government will try to
avoid new capacity excesses and curb rebounding inflation. These
are all very challenging tasks.
Maintaining economic growth requires scientific development,
taking into account the impact of stability measures on sustainable
economic growth in the future. Bearing this in mind, we believe
it's necessary to stabilize the growth rate by boosting domestic
demand with deeper and more frequent adjustments of policies.
However, policy adjustments must take into consideration the real
demands of businesses and equality among different types of
In the coming years, another important method to tap the
country's internal drive for sustainable economic growth is to
develop urbanization; namely, by making it easier for migrant
people from rural areas to become urban citizens.
Of the 700 million urban people in the country, about 200
million are rural migrants. It is predicted that an extra of 300
million people are expected to move into cities in the coming 20
years. The process of transformation from rural to urban
populations calls for new requirements. After all, the domestic
demand coming out of these changes will be very important for
China's economic development.
It's important to avoid the old practice of maintaining growth
by relying on massive industrial programs, such as investing in
metal and chemical industries. It's time to explore and find new
ways of economic growth.
While trying to stimulate China's economy, we should also take a
close look at the economic structure itself. High energy-consuming
and highly polluting industries, for instance, should be curbed. In
the pursuit of growth, it's important to prevent the resurgence of
any outdated economic systems.