China has made tremendous achievements in fixed assets investments
during the ninth Five-Year Plan period (1996-2000).
The target for fixed assets investments was set at 13,000 billion
yuan (US$1,566 billion), and based on the first four years' performance
and estimates for the year 2000, this could easily be achieved.
Adopting moderately tight fiscal policy, the government intended
to control investment in order to tame runaway inflation at the
beginning of the period. In 1997, the country's export volume, foreign
investment and domestic demand all dramatically plunged because
of the Asian financial crisis. To offset the negative impact of
the crisis, the central government pursued proactive fiscal policies
the following year, including issuing long-term building treasury
bonds in a bid to attract bank loans and idle capital.
The central government has rigorously controlled the use of funds
raised by the bonds to avert unnecessary building.
Central and western regions of China were given top priority in
using the capital, and governments at all levels have paid close
attention to improving the quality of the projects aided by the
The central government had invested 1,100 billion yuan (US$132.5
billion) by the end of 1999, and projects with a total investment
of 2,200 billion yuan (US$265 billion) are index.htmcted to be completed
by the end of 2001.
Bonds contributed 1.5 percent to the gross domestic product (GDP)
in 1998 and 2 percent in 1999, laying a solid foundation for hefty
economic development in the new century.
Water conservation and environment protection projects have drawn
huge capital. Flood control works and water harnessing projects
at the Yangtze River and Taihu Lake valley have considerably alleviated
flood damage. Investment of 115 billion yuan (US$13.8 billion) has
been injected into the areas.
The Three Gorges project is well on track, and by the end of the
year 2000, 65 billion yuan (US$7.8 billion) -- half of the total
planned investment -- will have been put into it. In 2003, the first
batch of generators will perform operations as scheduled.
Investment in forests has also helped to improve the environment.
By 1998, forest coverage across the country had increased by 2.6
percent to 16.55 percent since 1995.
Railway and highway construction has also taken a large share.
During the ninth Five-Year Plan period, 800 billion yuan (US$96.4
billion) was earmarked for road building, five times that of the
previous five-year period. To date, 99 percent of the towns and
90 percent of the villages across the country have been connected
up by roads. The total length of national railway is expected to
reach 68,000 kilometers by the end of 2000, 6,000 kilometers longer
than in 1995.
Concerning electricity, the country will be able to generate 1,300
billion kilowatt-hours of electricity by the end of 2000, around
30 percent up from 1995. Upgrading grids and building nuclear power
stations is also well under way.
Public utilities in cities such as gas and water supply, transport
and rubbish disposal have made rapid progress. Domestic properties
have also improved and in 1999, the average housing area for each
urban and township resident reached 9.3 square meters.
Investment in education also soars. Up to 100 universities and
colleges have been developed during the period, following the launch
of the 211 projects.
In 2000, 1.8 million students were admitted to universities and
colleges. Emphasis has also been placed on developing schools in
poverty-ridden areas in central and western parts of China.
Upgrading technology and innovations will propel economic development
The technology upgrading program helps large- and medium-sized
state-owned businesses to extricate themselves from difficulties.
The nation aims to stimulate innovation in information and automatic
technology, energy, transport and materials.
During the ninth Five-Year period, the high-tech development zones
have entered a new stage characterized by technology innovation.
The zones have vigorously boosted the local economy with a high
rate of return on investments. By the end of 1999, 17,000 high-tech
businesses in the zones have contributed an industrial added value
-- extra cash made in production industries -- of 147.6 billion
yuan (US$17.8 billion), with an export volume worth US$12 billion.
Reforming financial fields has helped China adapt to the socialist
market economy. During the period, banks have been required to take
all the risk in granting loans and the government no longer interferes
in banks assessing and approving credit.
The government has further regulated security investment and stepped
up its issue of stocks and bonds to encourage companies to use the
capital market and transform themselves into shareholding companies.
The ninth Five-Year Plan period has also reinforced supervision
over investment by governments at all levels. Since 1998, inspectors
have been sent to examine projects -- especially those aided by
treasury bonds -- to guarantee the government's investments are
being properly used.
Government purchase has also been regulated in the period. As the
country has adopted a law for public bidding, any projects paid
for out of national funds have to invite bidding from the public.
(China Daily 10/03/2000)