A high-level meeting of the Community Party of China (CPC) held on Wednesday set the tone for China's economic policy next year.
The Central Committee's Political Bureau members, chaired by Hu Jintao, general secretary of the Central Committee and president of China, officially decided to shift from proactive to prudent fiscal and monetary policies "to conform with changes in China's macroeconomic situation and consolidate the achievements of macro-control."
The meeting was held to analyze the current economic situation and plan for economic work next year. Other decisions included improved coordination between various macro-control policies and proper control of total economic output "to promote steady and relatively fast economic growth" in 2005.
According to participants, agriculture and farmers' issues will remain the top priority of the Party next year. Support to agriculture and rural economic expansion "will be further enhanced to promote rises in grain production and farmers' income."
Another important task in the coming year will be adjusting the economic structure in line with domestic and international market situations and with an eye to improving core competitive power. Investment in fixed assets will be kept in check by strictly controlling land and credit supply.
Politburo members also agreed to promote resource conservation consciousness throughout the nation and accelerate the development of a "recycle economy."
Building up employment and the reemployment of laid-off workers and improving social security are high on the Politburo's list of things to do.
Plans also include stimulating consumption and creating concrete safeguards for the fundamental interests of the people, speeding development in the realms of science and education, and balancing the relationship between reform and development and protecting social stability.
Participants to the meeting pointed out that economic achievements did not mean that all problems had been eliminated. The Chinese economy faces challenges that "urgently need to be dealt with," they said.
Growth in grain production and farmers' income is still somewhat tenuous. Meanwhile, the over-investment trend lingers on, together with some "other deep-rooted problems hindering healthy economic growth."
China's proactive fiscal and monetary policies have been in place since 1998. Analysts say that the shift is now being made to forestall volatility.
The proactive fiscal policy has resulted in seven years of stunning economic growth, but by early this year the economy was showing signs of excessive investment and overheating in some sectors, while inflationary pressures were on the rise.
"A prudent policy is the logical choice to curb overheating of the economy, maintain steady development and improve the efficiency of the economy," said Hang Lin, associate research fellow with the Institute of Macroeconomics under the Chinese Academy of Social Sciences.
(Xinhua News Agency December 2, 2004)
