As the annual session of China’s National People’s Congress has started, achieving sufficiently high economic growth will be indispensable for helping to stabilize Chinese society. It is also something other countries want to see as the world economy is rapidly cooling down due to the financial crisis that started in the United States. In fact, finance ministers and central bankers of the Group of Seven developed nations in February welcomed China’s large-scale fiscal spending in their statement.
China’s five-year streak of double-digit economic growth was broken last year when growth dropped to a seven-year low of 9 percent. The global economic downturn especially put a brake on exports, which account for about 40 percent of China’s gross domestic product. The fourth quarter of 2008 saw the Chinese economy grow only 6.8 percent from the year before.
Premier Wen Jiabao told the parliament that China is facing “unprecedented difficulties and challenges.” He set the goal of achieving about 8 percent economic growth in 2009. Growth of this scale is needed to create more than 9 million jobs in urban areas and absorb new graduates and surplus labor from agricultural villages. To help achieve the goal, local governments will issue bonds worth 200 billion yuan (about ¥2.9 trillion). In addition, tax cuts of 500 billion yuan (about ¥7.2 trillion) will be carried out.
In a reasonable move, China in November decided to spend 4 trillion yuan (about ¥58 trillion) through 2010 to boost domestic demand as a means of stimulating the economy while decreasing reliance on exports. If this helps China play the role of a locomotive for the world economy, China’s position in the international community could be enhanced.
As China tries to get out of the global economic crisis, it will be important to improve the quality of products, including electronics appliances. Last year also saw safety problems with foods, such as tainted “gyoza” dumplings and milk. Improvement in energy efficiency and reduction of environmental disruption caused by gas emissions and waste water would benefit not only China but also the world.
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