China Govt Hopeful Of Maintaining Growth Pace

Chinas rapid economic growth is sustainable for another five to 10 years barring natural disasters and blunders in government policy, a senior government statistician said on Friday.

In general, rapid economic growth in other countries lasts 10 to 15 years...and ours has been going for just five years.

Its safe to say it can continue for a period of time, Qiu Xiaohua, chief economist of the State Statistical Bureau, told reporters.

If there are no big mistakes in policy and no natural disasters, it is not a big problem for China to maintain an economic growth of eight per cent, he said.

 

Chinas economy grew by a sizzling 9.7 per cent last year and 9.4 per cent in the first quarter, compared with an official target for 1997 of 8.0 per cent.

Rapid economic growth was sustainable because of Chinas huge market, high savings rate, economic reforms and the consistency of government policy, Qiu said. These advantages...will not disappear in the short term, he said.

Chinas rural areas have great potential in terms of consumption, with the growth rate of farmers income higher than that of urban residents, he said. Rural incomes rose nine per cent in 1996 and five per cent the previous year.

China is the largest market in the world, with a population of 1.2 billion the worlds biggest.

Almost two decades of economic reforms have transformed China from an economic backwater to a powerhouse.

It is now the worlds largest producer of grain, cotton, television sets, bicycles, washing machines and refrigerators.

Savings of individuals, including investments in stocks and bonds, would account for no less than 35 per cent of Gross Domestic Product in the near future, Qiq said. He forecast high economic growth and low inflation in 1997.

It is likely...for Chinas economy to grow nine per cent (this year) and inflation to be controlled at less than six per cent, Qiu said.

China has set a target of 6.0 per cent inflation for 1997 compared with 6.1 per cent last year, but officials expect the rate for the year to be as low as 3.0-4.0 per cent.

Stability is high on the governments agenda with two big events scheduled for later this year the return of Hong Kong to Chinese sovereignty at midnight on June 30 after 156 years of British rule, and the Communist Partys 15th congress.

For the return of Hong Kong on July 1 and for the opening of the 15th party congress, China will create a relaxed environment, Qiu said.

Policy will not have big rises or big falls, Qiu said. The government wants to maintain a stable economic policy, a stable society and maintain political stability. This policy...is very clear.

Chinas economy was not without problems, however. Many of them cannot be solved overnight, including lumbering state enterprises that are used to Soviet-style central planning and have difficulty adapting to a market economy.

Over-concentration of investment by state enterprises in some industries had resulted in rising stockpiles, Qiu said. Chinas stockpile of industrial goods was worth 520 billion yuan ($62.7 billion) by the end of last year.

($1 = 8.3 yuan)

Beijing newsroom (8610) 6532-1921