"The huge number of newly started projects indicates the investment next year will still keep a high growth rate," said Zhu Baoliang, an economist with the State Information Center. Zhu said this is a realistic task to prevent the economy from becoming overheated.

Will the tightened monetary policy seriously affect Chinese economic growth? Ha argues that the government won't sacrifice the economic growth rate to curb inflation.

Li Yongsen, an economic professor with Renmin University of China, said the tightened monetary policy does not mean the economy is going bad. The economy is still running at a stable level, Li said. The guidelines send out a signal that the Central Government intends to achieve stable, sustainable and healthy economic development.

Encouraging consumption

The economic work conference raised the issues of coordinating consumption, investment and export, expanding employment, rationally adjusting income distribution, raising income levels and improving the social security system.

Cao Jianhai, an industrial researcher with the Chinese Academy of Social Sciences (CASS), said the new guidelines will continue to expand domestic demand and improve consumption ability.

In the first three quarters of this year, consumption contributed 37 percent to the GDP growth, slightly higher than before. But the proportion of investment takes the largest share, contributing 41.6 percent.

Cao said that judging by the common rule of global economic development, consumption is the eventual momentum for economic growth, and should account for about 80 percent of that growth. Currently, the lack of consumption ability is a big problem in China.

Li Xiangyang, Vice Director of the Institute of World Economics and Politics of the CASS, said the investment proportion is nearly 20 percentage points higher than that of developed countries, but consumption is 20 percentage points lower.

"The reason is very complicated," said Li.

First, the lack of domestic consumption can be attributed to a shortage of disposable income. Second, the increasing government fiscal revenue was mostly put into administrative expenditures and production investments. Moreover, the insufficient social security system in terms of education, medical insurance and housing has raised forward consumption expenditures, which in turn suppressed consumers' ability to consume.

Li suggested that adopting a series of adjustment measures to handle the supply and demand imbalance would be of benefit. Irrational investment demand and export demand must be strictly constrained, Li said, adding that it is crucial to protect the consumption ability of those with low incomes under recent inflation pressures.

Focusing on weak links

When setting the tone for next year, the Chinese Government will pay more attention to weak links in social and economic development.

It was stated clearly at the economic work conference that in 2008 the government will invest more to improve the standard of living.

According to the conference, China will expand employment, establish a rural pension system, carry out medical insurance reform as well as launch free compulsory education in both rural and urban areas. It was also said at the conference that the government will speed up the construction of affordable housing.

Zhou Tianyong, Deputy Director of the Research Office at the Party School of the Central Committee of the CPC, pointed out three aspects concerning people's living. First, the government will take more measures to improve people's income. Second, the social security system will cover more citizens. A better pension and medical insurance system in urban and rural areas will be established to benefit weak groups. Third, the government will invest more in education.

"The conference shows the government will pay more attention to the disadvantaged group of society," said Zhou.