The central government's plan to set a higher economic growth
target this year indicates China has become practical in its
economic planning, economists said.
The National Development and Planning Commission said last month
the government is to raise this year's growth target from 7 percent
to 8 percent.
Economist Lu Zhongyuan said the adjustment in the growth target
suggests the government has become practical in its economic
planning.
"The country's economy is capable of maintaining a growth rate
of 8 to 9 percent this year and next year," said Lu of the State
Council Development Research Center.
Tang Min, chief economist of the Asian Development Bank resident
mission in China, said an 8 percent growth target for this year was
realistic.
Otherwise, the growth rate would be underestimated, he said.
The country's gross domestic product has grown at an average
annual rate of more than 9 percent during the past 25 years, he
said.
Now the government is giving key attention to macro control,
hoping the economy will grow at a slower rate.
"If the government can effectively prevent the economy from
becoming overheated, the Chinese economy can grow at 8 percent to 9
percent in the medium and long term," he said.
Zhang Xueying, a senior economist with the State Information
Center, said the adjustment in the growth target did not mean the
government had altered its judgment for future economic
development.
"It is the planning itself which is changed," he said.
Deputies to the National People's Congress have long challenged
the country's growth target, which stood at 7 percent during recent
years.
Real gross domestic product rose a year-on-year 9.1 percent in
2003 and 9.5 percent during the first three quarters last year.
China's potential economic growth has been speeded up during
recent years, due to the progress made in science, Zhang said.
The government needs to set a suitable rate for future
development, he said.
"Both a higher rate and a lower rate would be harmful to the
country's sustainable economic development," he said.
A faster rate would result in a strain on energy and resources,
which would lead to chaos in future economic development, he
said.
On the other hand, a slower rate would result in slow growth in
farmers' income and insufficient employment.
Zhang said the 8 percent rate for this year has nothing to do
with the country's 11th Five-Year Plan (2006-10).
The government still needs to further observe this year's
economic performance, before it mapped out a plan for the next five
years.
"It is too early to say the Chinese economy has achieved a soft
landing," he said.
(China Daily January 10, 2005)
