The China Economic Development Senior Forum, sponsored by the Organizing Committee of World Economic Development Declaration (WEDD) and the China International Institute of Multinational Corporations, was held on Saturday in Beijing.

 

The theme of the forum was “China’s Economic Development Strategy in the Full Open Door Era”.

 

 

Mr. Jiang Zhenghua, Vice Chairman of the Standing Committee of the National People's Congress, Mr. Wang Maolin, Vice Chairman of the Law Committee of the National People's Congress, and Mr. Yu Guangzhou, Vice Minister of Commerce, all attended the conference.

 

Mr. Jiang made the keynote address. He said that China would continue to adopt an active fiscal policy combined with a stable monetary policy. The country would expand domestic demand and promote consumption so as to ensure the sustainable, rapid and healthy growth of the Chinese economy.

 

Jiang believes that housing and automobiles have currently become hot new consumption areas in China. Thanks to China's upgraded consumption demands and the improved investment climate, China has maintained its comprehensive advantages in attracting overseas capital, retaining its position as a hot spot for overseas investors, especially multinational corporations.

 

He told China.org.cn: “Pork prices rose 11.5 percent in July, creating an 85.8-percent increase as compared to the same month last year. Frozen pork prices rose 89.2 percent as compared to July of last year. These soaring prices, due largely to short supplies and mounting production costs, have contributed significantly to China's 33-month-high CPI, which is up 5.6 percent since July of last year.”

 

“But monthly CPI growth in the 5 percent range doesn't reflect long-term inflation,” he stressed. “Actually, short-term price increases exert little effect on the long term national economy. Even if China's CPI in 2007 reached 4 percent, it would still be healthy.”

 

Jiang clarified that the 3 percent CPI growth limit only applies to an 8 percent GDP growth; given the 11.5 percent GDP in the first half of the year, a 4.5 to 5 CPI percent increase is acceptable.

 

“For example, the United States economic growth is currently below 3 percent. In fact, the latest released CPI figures from that country have just reached 2.7 percent growth. This reflects almost the same rate as their economic growth. But China’s booming economy, with an annual growth rate of over 10 percent, has been pushing up prices of consumer goods,” he told China.org.cn.

 

“It doesn’t mean the government will not take action. On the contrary, relevant authorities are set to take appropriate measures. The Chinese CPI will slide down in the coming months,” he assured China.org.cn.

 

Also speaking at the forum, Mr. Yu Guangzhou, Vice Minister of Commerce, admitted that China’s economy is now facing a series of problems, including long-standing problems regarding the economic system. There is an imbalance of economic development coupled with an ever-increasing income gap.

 

Although positive signs of current economic development are evident revival momentum for older industries still lags behind, Mr. Yu noted.

 

“China encourages foreign investors to join in our regional economic development. Chinese authorities will revise regulations in order to encourage foreign-funded companies to invest in the central and western areas,” he stated.

 

As part of an ambitious plan to develop the western part of the country, China has decided to direct investments at infrastructure construction and to support setting up economic and technological development zones in the region, Mr. Yu explained.

 

He told China.org.cn that in addition to the western areas, other regions undergoing economic development would also provide excellent opportunities to foreign investors; the Yangtze River Delta and Pearl River Delta are expected to take a lead in the national economy. They will extend their success to other nearby, comparatively less-developed regions.

 

“Reviving the old industrial bases in northeastern China, especially restructuring state-owned enterprises, will also provide new space for foreign investors,” he added.

 

During the meeting, he also praised the forum for providing both Chinese and foreign enterprises with a platform to exchange ideas and to cooperate on both a global and national level. China and its business allies can jointly seek solutions to the foremost issues in the world. Chinese economic development is being enhanced toward sustainable economic growth.

 

“This conference will promote the establishment of a new international economic order that features equality, mutual benefit, interdependence and common development on a global scale,” he noted.

 

(China.org.cn by Staff Reporter Wang Ke August 19, 2007)