Faces Six Problems in Economic Development
China's economic development during the next five-year plan
(2001-05) must tackle six major problems, says the latest issue
of Outlook, a Chinese news weekly.
The magazine says that great changes, such as the disappearance
of a commodities shortage and the forming of a buyer's market,
have taken place in China during the current five-year plan
"The changes mark a completely new stage of development
for the Chinese economy," the article says, adding that
these changes demand greater efforts in solving the six major
According to the magazine, the first problem facing the economy
will be how to maintain and improve the quality of the economic
In the past years when domestic demand was huge, it was not
difficult to raise the economic growth rate by channeling more
investment into the national economy.
However, it becomes more difficult to support high economic
growth in a period of technological innovation with its new
and more expensive products and equipment, it said.
The second major problem will be how to quicken reform while
emphasizing national stability.
When the Chinese economy enters a period of increased efficiency,
more effort will be needed to control resources allocation.
The reform of labor, income distribution, social security, government
functioning, macro-management, and the market system are also
expected to be further developed .
All this and more will touch on the established interests of
many people, which in turn will have an impact on overall social
The magazine said that the third major problem will be how to
achieve sustainable development while efforts are taken to speed
up the country's industrialization process.
As the world's most populous country, it is necessary that China
promote its industrialization. However, the fact that the country's
per capita natural resources and space are limited means that
it must pay enough attention to sustainable development in the
"The fourth problem will be how to cope with the expanded
migration of rural workers," the magazine says.
China's industrialization calls for the shifting of rural labor
to urban areas. However, this trend contradicts the necessity
of pooling capital and resources into capital- and technology-intensive
industries, which needs fewer workers.
It will become a major challenge for China to upgrade its industrial
sector while gearing the economy more to both the domestic and
international markets, the magazine notes.
Early this century, the national economy will become more integrated
into the international one. "This will pose a severe test
for China's capital- and technology-intensive industries,"
While China's labor-intensive industries still enjoy some cost
advantages, the capital- and technology-intensive industries
are at a disadvantage in competing with their foreign rivals.
The article predicts that the last problem for China to face
will be how to best deal with the relationship among reform,
stability, and development.
In the next few years, the change in China's economic growth
mode and the emphasis on its economic restructuring will inevitably
lead to sharp conflicts of interests.
In particular, China's huge work force, expected to reach 860
million people by the end of this year and 910 million by the
year 2005, will pose a great challenge to the country when slipping
economic growth offers fewer jobs, the magazine points out.
"The 10th Five-Year Plan will become the transitional period
for both our economic development and our economic structure,"
The nation must keep a clear mind while seeking the proper development
path in a fiercely competitive global environment, the article