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2012 was considered “a very difficult year” by the World Bank. Against the complicated domestic and foreign economic background, some Chinese and foreign institutions hold a pessimistic opinion towards the Chinese economy.
How to look at China’s current economic situation? Will the economic growth rate have quarterly decrease? Will big changes happen to the basic elements of China’s economic development? And can China keep its stable and fast economic growth?
For these four questions, Li Pumin, deputy secretary-general of the National Development and Reform Commission (NDRC), gave out his own opinions.
Right Understanding of Slowed GDP Growth
The year of 2011 was the first year of China’s 12th Five-Year Plan. In Li Pumin’s opinion, the economic development of China in 2011 had several highlights, one of which was the 9.2% economic growth rate.
When talking about the lowered economic growth rate, he stressed that correct analysis and understanding are necessary to hit the core of the problem. In 2011 the Chinese government laid the emphasis of macroeconomic policies on changing economic structure, transforming development pattern, controlling commodity price and improving people’s livelihood. The eased economic growth was somewhat the result of active macroeconomic control.
Li Pumin said that the GDP growth of China still maintained the development trend in the 30 years after the reform and opening up. The international institutions forecast that the global economic growth rate was about 3% last year, one third of the China’s economic growth. China still ranked No. 1 among the major economies in growth rate.
Efficient Economy Improved People’s Livelihood
Li Pumin said that the GDP growth rate in 2011 was lower than the one in 2010, but the financial income and major enterprises’ profits still grew at a fast pace. According to the statistical data from the National Bureau of Statistics, the industrial enterprises above the average size in China earned the profits of 5.4544 trillion yuan in 2011, up 25.4% from 2010. Among them, the state-owned and state holding enterprises saw their profits increase by 15%; the collectivelyowned enterprises’ profits rose 24%; the shareholding enterprises had a 31.2% increase in their profits, the foreign-funded enterprises’ profits increased by 10.6% and the private companies enjoyed the 46% increase of their profits. In addition, the financial data from the Ministry of Finance rose 24.8% to 10.374 trillion yuan.
As for the structural change, Li Pumin said: “the agricultural development got glorious achievements last year, when the central government invested more than 1 trillion yuan into the agriculture, countryside and farmer, up 21.3% from 2010. The crop production had an increase for eight straight years.”
The highlight of the industrial structural change, based on the information from the Ministry of Industry and Information Technology, is the 15-billion-yuan special capital for boosting key industries and technological reform, which aimed at the construction of energy-saving and new energy projects. In addition, all provinces did a fantastic job in eliminating the behindhand pro- duction in 18 industries, during which 2255 enterprises that caused pollution and wasted resources and energy were closed. The emerging industries also saw a fast development pace, with the hi-tech industry’s added value increased by 16.5%, higher than the average 13.9% increase of the whole industry.
The livelihood was considered the biggest light spot in 2011. The number of new working positions hit the historical high in that year despite the slowed economic growth rate. The construction of indemnificatory houses was fully promoted with the construction of 10 million indemnificatory houses started on time. The social security industry also had significant development last year in spite of the unstable and uncertain factors of the global economy.
According to the information from the Ministry of Human Resources and Social Security, the pilot areas of rural insurance saw a drastic increase in their number. Simultaneously, the tryout about the new endowment insurance of urban citizens was started as well and had recruited 360 million policyholders by the end of 2011. The fundamental pensions were given to over 100 million aged citizens in both urban and rural areas. The Ministry of Human Resources and Social Security has already set up the goal of spreading the fundamental endowment insurance system to cover all urban citizens in China and building up the social security framework with the aged care, medical
care and basic living allowance as the core.
Stable Development to Be Maintained
When talking about the situation in 2012, Li Pumin showed apparent confidence. “China has great potential in domestic demand, which is not fully unleashed. Though the international situation is very grim, China’s economy will maintain its fast and stable development trend with the united forces of various advantages.
His confidence came from three aspects. The first one is the necessity of China to keep its fast and stable economic development against the severe international situation and deteriorating European debt crisis. The second one is the great potential of the domestic demand in China. The fast industrialization, urbanization and agricultural modernization serve as the key to releasing this great potential by enlarging the demand and improving people’s livelihood. Meanwhile, reasonable investment size is needed to reinforce the weak parts of social development, provide plentiful power for economic development and create conditions for economic structural change. The third one is the socialism market system will provide unlimited stimulus for the social development.
“The great potential in China has not been fully unleashed. In the foreseeable future, the Chinese economy will grow at a fast pace,” said Li Pumin.
How to look at China’s current economic situation? Will the economic growth rate have quarterly decrease? Will big changes happen to the basic elements of China’s economic development? And can China keep its stable and fast economic growth?
For these four questions, Li Pumin, deputy secretary-general of the National Development and Reform Commission (NDRC), gave out his own opinions.
Right Understanding of Slowed GDP Growth
The year of 2011 was the first year of China’s 12th Five-Year Plan. In Li Pumin’s opinion, the economic development of China in 2011 had several highlights, one of which was the 9.2% economic growth rate.
When talking about the lowered economic growth rate, he stressed that correct analysis and understanding are necessary to hit the core of the problem. In 2011 the Chinese government laid the emphasis of macroeconomic policies on changing economic structure, transforming development pattern, controlling commodity price and improving people’s livelihood. The eased economic growth was somewhat the result of active macroeconomic control.
Li Pumin said that the GDP growth of China still maintained the development trend in the 30 years after the reform and opening up. The international institutions forecast that the global economic growth rate was about 3% last year, one third of the China’s economic growth. China still ranked No. 1 among the major economies in growth rate.
Efficient Economy Improved People’s Livelihood
Li Pumin said that the GDP growth rate in 2011 was lower than the one in 2010, but the financial income and major enterprises’ profits still grew at a fast pace. According to the statistical data from the National Bureau of Statistics, the industrial enterprises above the average size in China earned the profits of 5.4544 trillion yuan in 2011, up 25.4% from 2010. Among them, the state-owned and state holding enterprises saw their profits increase by 15%; the collectivelyowned enterprises’ profits rose 24%; the shareholding enterprises had a 31.2% increase in their profits, the foreign-funded enterprises’ profits increased by 10.6% and the private companies enjoyed the 46% increase of their profits. In addition, the financial data from the Ministry of Finance rose 24.8% to 10.374 trillion yuan.
As for the structural change, Li Pumin said: “the agricultural development got glorious achievements last year, when the central government invested more than 1 trillion yuan into the agriculture, countryside and farmer, up 21.3% from 2010. The crop production had an increase for eight straight years.”
The highlight of the industrial structural change, based on the information from the Ministry of Industry and Information Technology, is the 15-billion-yuan special capital for boosting key industries and technological reform, which aimed at the construction of energy-saving and new energy projects. In addition, all provinces did a fantastic job in eliminating the behindhand pro- duction in 18 industries, during which 2255 enterprises that caused pollution and wasted resources and energy were closed. The emerging industries also saw a fast development pace, with the hi-tech industry’s added value increased by 16.5%, higher than the average 13.9% increase of the whole industry.
The livelihood was considered the biggest light spot in 2011. The number of new working positions hit the historical high in that year despite the slowed economic growth rate. The construction of indemnificatory houses was fully promoted with the construction of 10 million indemnificatory houses started on time. The social security industry also had significant development last year in spite of the unstable and uncertain factors of the global economy.
According to the information from the Ministry of Human Resources and Social Security, the pilot areas of rural insurance saw a drastic increase in their number. Simultaneously, the tryout about the new endowment insurance of urban citizens was started as well and had recruited 360 million policyholders by the end of 2011. The fundamental pensions were given to over 100 million aged citizens in both urban and rural areas. The Ministry of Human Resources and Social Security has already set up the goal of spreading the fundamental endowment insurance system to cover all urban citizens in China and building up the social security framework with the aged care, medical
care and basic living allowance as the core.
Stable Development to Be Maintained
When talking about the situation in 2012, Li Pumin showed apparent confidence. “China has great potential in domestic demand, which is not fully unleashed. Though the international situation is very grim, China’s economy will maintain its fast and stable development trend with the united forces of various advantages.
His confidence came from three aspects. The first one is the necessity of China to keep its fast and stable economic development against the severe international situation and deteriorating European debt crisis. The second one is the great potential of the domestic demand in China. The fast industrialization, urbanization and agricultural modernization serve as the key to releasing this great potential by enlarging the demand and improving people’s livelihood. Meanwhile, reasonable investment size is needed to reinforce the weak parts of social development, provide plentiful power for economic development and create conditions for economic structural change. The third one is the socialism market system will provide unlimited stimulus for the social development.
“The great potential in China has not been fully unleashed. In the foreseeable future, the Chinese economy will grow at a fast pace,” said Li Pumin.