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Gov't Adjusts Economic Growth

Governments across China have adjusted their annual economic growth projections downward following efforts to cool their respective economies down and make them more efficient and environmentally friendly.

More signs show that localities are striving to shift from extensive to more intensive economic growth modes -- or qualitative rather than quantitative growth, under the direction of the central government.

Wang Qishan, mayor of Beijing, announced at the latest session of the current People's Congress of Beijing, the municipal legislature, that the city's 2005 economic growth was targeted at 9 percent, down 4.2 percentage points from the city's real GDP growth last year.

Mayor Wang emphasized that his administration will make more efforts "to promote economic restructuring, intensify urban management and build a harmonious society."

His views were echoed by officials in Tianjin, an industrial port city near Beijing, and in Guangdong Province, an economically developed coast region in south China.

Dai Xianglong, mayor of Tianjin, said in his government's annual report that his city adjusted its annual economic growth downward by 3.7 percentage points to 12 percent for the current year. Dai said he attached great importance to the economic performance indicators: jobless ratio, inflation control and energy consumption per 10,000 yuan (US$1,205) of GDP as well as to environmental protection.

Guangdong Governor Huang Huahua, also in his government report for last year, set the province's annual economic growth target at10 percent, down 4.2 percentage points. He said there is still a long way to go before the province realizes an intensive economic growth pattern, as many systematic barriers and an insufficient supply of resources remained.

Those lowering their economic growth projections also included eastern Shandong Province, another economic engine along the nation's coast, and Shenzhen, China's first special economic zone. Shandong's economic growth target is five percentage points lower than the year-earlier level of 15 percent; while Shenzhen's, is set at 13 percent, 4.3 percentage points lower.

Shanghai, China's most economically powerful city, has decided to strive for a 11-percent economic growth this year, down from its 13.5-percent real growth last year.

Zhejiang, an economically developed province in east China, eventually realized more than 1 trillion yuan (US$120.5 billion) in GDP last year, becoming the fourth local economy in the nation to do so. The provincial government issued China's first province-level white paper analyzing the cost of growth, which highlights the government's determination to put an end to economic growth amid huge investment, high resources consumption and heavy pollution.

All these are in conformity with the Chinese government's new development strategy, which stresses concerted and sustainable development, according to Zhou Liqun, head of economic institute of the prestigious Nankai University based in Tianjin. The new concept of development was hailed by Chinese economists as of historic significance in China's economic development.

The Chinese central government set 2004 economic growth at 7 percent at the year's beginning and kicked off macro-control last April to cool down the economy, which was then beset with overheating investment, land abuse and wasteful duplicate construction projects in some sectors and areas. In the meantime, the Government focused more efforts on traditionally weak sectors such as agriculture.

Experiences worldwide show that when an economy has its per-capita GDP reach US$1,000-3,000, it will enter a critical development stage, in which various social problems, including rising unemployment, widening gap between the rich and the poor and aggravating social instability, will crop up. Economists warn that China, which has just crossed the US$1,000-per-capita GDP threshold, should be careful to avoid the same fate.

Tianjin Mayor Dai Xianglong said, China is now challenged by a larger population, more people without jobs and an aging society. Greater challenges are coming from the widening income gap between rural and urban dwellers, Dai added.

Experts say that expanding social wealth should eventually increase people's sense of happiness and enable those in different social strata and from different areas to share results of economic and social progress.

To this end, Beijing, while lowering its 2005 GDP growth projection, will try to limit its unemployment rate to 2.3 percent and help 170,000 laid-off workers to find a new job this year.

Tianjin is improving social welfare services and is striving for a pension and jobless insurance coverage of more than 95 percent of the population. It also plans to train one million rural laborers in three years.

(Xinhua News Agency February 13, 2005)

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