The report states that this year the Asian economic situation will continue its good development momentum, which will help China reinforce its economic and trade exchanges with countries in the region. At the same time, China's political stability and economic growth will also be attractive factors to foreign investors, because of the increasing investment risk in the global market.

However, the report also says that the risks challenging global economic recovery will have a negative impact on China's economic growth; regional political unrest will add uncertainties to the external environment for China's economic development; the constant rise in oil prices and the global trend of deflation will have negative effects on China as well.

The report analyzes in detail both negative and positive factors that will affect China's economic and financial development.

It reiterated that in 2003, the central bank will continue to practice a prudent monetary policy, steadily carry out reforms on interest rates and rationalize the distribution of financial resources, so as to give strong support to economic growth.

(Xinhua News Agency February 21, 2003)