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Strategic Economic Restructuring Under Way

China is undergoing a strategic economic restructuring in an environment of the new technology revolution, covering industrial, regional, urban and rural structural reform. Only in this way can it adapt to the intense international competition amid economic globalization.

Wang Chunzheng, vice minister of the State Development Planning Commission made this point in his speech of “China’s economic restructuring in the economic globalization process” at the China Development Forum.

The information technological revolution has greatly speeded up economic globalization and informatization trend, providing both broad opportunities and severe challenges for China’s development. In the past 20 years since the country’s opening-up there has been dramatic increase in our gross national productivity.

The imbalance between supply and demand has basically ended. But periodical and structural surpluses have appeared in daily industrial and agricultural products supply. The problem of an irrational economic structure has started to show up, mainly reflected in uncoordinated regional development, low level of urbanization, general low quality of the national economy and a blunted international competitive edge.

Wang said: “This structural deficiency is neither compatible with the needs of speeding up economic development nor to further open ourselves to the globalization drive.”

“The outline of the tenth Five-Year Plan (2001-05) for the national economic and social development, which was adopted in the recent Fourth Session of the Ninth National People’s Congress, has specified the main projects for economic restructuring in the next five years: optimizing and upgrading the industrial structure to promote the national competitive edge; enhancing the balance of ratios between the primary, secondary and service industries in the gross domestic product to 13 percent, 51 percent and 36 percent respectively; remarkably improving the information level of society and the national economy; narrowing the development gap between regions and increase the level of urbanization.”

Wand said that, to achieve this goal, the country has to pay close attention to the following aspects:

-- To accelerate the pace of industrial restructuring. The focus of the reform in the coming five years is to “enforce primary industry, promote second industry and develop tertiary industry.” Priority should be given to the development of information, financial and insurance services.

-- To vigorously boost national economic informatization and integrate it with the restructuring model.

-- To improve the urbanization level and optimize the urban and rural economic structure. In the next five years, with gradual improvement of rural productivity and accelerating industrialization process, a urbanization strategy is needed to “selectively develop some satellite small towns, proactively develop medium-sized and small cities, further improve regional central cities’ functions and bring into full play to the big cities’ function of radiating economic growth out to peripheral areas.”

-- To restructure the distribution of productive forces to boost and achieve balance in regional economic development. While accelerating the development of central and western China, the government must simultaneously keep giving full play to the “engine” function of the eastern coastal regions in terms of structural reform, scientific innovation, opening-up and fast economic development. Breakthrough development for infrastructure facilities and ecological environment in the western region should be achieved in five to 10 years and a significant development witnessed in education, science and technology.

(CIIC 04/03/2001)

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