2001: What Will Economic Boost Usher in for the Chinese People?

In early spring of the new millennium, the Chinese economy is growing healthily, a harbinger of another boom ahead. Industrial added value hit 169.5 billion yuan (US$20.42 billion) in January this year, a rise of 2.3 percent over the same period last year, according to the State Bureau of Statistics. It is expected that the national economy will achieve rapid, sustained growth in 2001.

A thriving economy swells the money in ordinary people’s purse. By the end of last year, per capita GDP came to US$800, a historical high. As a result, domestic markets witnessed brisk consumption. Luxurious goods, including digital electric appliances, cars, and computers, have entered more and more Chinese homes.

Last year, the real estate market was brisk and this is especially true with regard to individual house purchase. According to a recent survey made in 35 large cities, house prices are climbing upward and people are showing greater interest in house trading. The boom is also fuelling development of related industries, including building materials, electrical appliances, and kitchen utensils. In addition, the Chinese people will continue their ever-increasing spending on travel, education and stock speculation.

In 2001, more Chinese families will realize the dream to own a car thanks to the ongoing individual loan business that began only a few years ago. With China’s forthcoming WTO entry, automobile manufacturers will produce more economy cars and touch off a price war. Besides, the country is removing various car consumption hurdles.

In spite of this economic prosperity, experts warn there has been a slower tendency in income growth recently. To increase incomes and improve the living standards, the government has adopted a series of policies in the first year of the 10th Five-Year Plan (2001-05) which include an active fiscal policy, the campaign to develop China’s West, and acceleration of the finance, insurance and intermediate industries.

The central government will adjust the agricultural structure and promote agricultural industrialization, as well as the development of township enterprises and rural urbanization, by relying on science and technology. Furthermore, reforms are being carried out so that taxes will replace fees, which will give more space and initiatives for farmers to develop agriculture.

In 2001 China will step up medical care reforms as medical costs have long been a focal point of public concern, and patients have consistently complained about the sky-high price of medicines. The reform should continue to break up monopolies, introduce competition, provide qualified services at relatively low cost, curb the irrational increase of medicine prices, and force hospital managers to shift the focus of their attention from medicine sales to improving the quality of medical care.

Over the past few years, there have been many complaints about the service quality of the service industry. Monopolies result in poor service in the industry. As China quickens its pace of WTO entry this year, the break up of monopolies is seen as inevitable for many industries. Economic globalization demands fair competition and economic performance that does not run counter to a market economy.

In 2001, industrial and commercial organizations all over the country will launch law enforcement campaigns against anti-competition activities in such monopoly areas as water, heat and power supply, and posts and telecommunications. The Chinese people now have many means to deliver their consumer complaints to these organizations.

As the whole year’s work depends on a good start in spring, the Chinese people are building a better life in their economic construction.

(CIIC by Guo Xiaohong 02/20/2001)

In This Series

Inflation Is Unlikely Next Year: Blue Paper

Chinese Economy on Fast Lane



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