CRI听力：China Sets Tone for Next Year's Economic Development

China's annual Central Economic Work Conference concluded on Wednesday, laying out the economic road map for the coming year in China.

What kind of fiscal policy will be undertaken to maintain stable economic growth against the backdrop of the adverse global economic downturn?

Our reporter Shuangfeng talked to two senior economists to find out.

Reporter:
According to the conference, in 2009 China will enhance and improve macroeconomic control efforts and carry out an active fiscal policy and a moderately easy monetary policy. The nation pledges to maintain stable, healthy growth next year through the expansion of domestic demand and economic restructuring.

Economists say the conference comes at a critical time in helping to prevent the Chinese economy from slowing down.

Professor Zhou Chunsheng, with the Cheung Kong Graduate School of Business, believes it is important to restructure the Chinese economy now.

"To cope with the global financial crisis, the central government issued its 4-trillion-yuan investment package to maintain stable economic growth. We should improve the efficiency of our investments, and mitigate the structural imbalance of the economy."
He points out that the gap between urban and rural areas, the imbalance in the industrial sector and the imbalance between investment and consumption all have contributed to restricting the development of China's economy.

Wang Xiaolu, Deputy Director of the National Economic Research Institute with the China Reform Foundation, echoes these sentiments. He says high savings rates have led to low consumption, and therefore made the growth of the Chinese economy highly dependent on investments and exports.

"To boost domestic demands, the fundamental issue is to restructure the economy. The short-term increase of investments couldn't adequately contribute to consumer growth. From the long term point of view, we should reduce the savings rates and avoid economic growth which relies primarily on investments and exports."

He says to reach that goal, the government should raise people's incomes on one hand, and reduce their economic burdens on the other.

"If the government could further improve public services, such as investing more on the medical system and in education, citizens will be more willing to spend money rather than saving it. What's more, the government's policy of building more low-rent housing will help low-income households to settle down. So they're not preoccupied with saving their money to buy a house."

Wang Xiaolu also suggests that the government should take more measures in promoting the development of the service sector.

Both economists say the economic guidelines will be quite helpful to fuel the country's economic growth, and these effects should be felt by June next year.(www.hXen.com)

Professor Zhou Chunsheng predicts that the economic growth of 2009 will be more than 8%. He says the effects brought about by the active fiscal policy should be seen in the coming months, because the investment will immediately contribute to the GDP. But for the easing monetary policy, its effects may lag behind, as there will be a longer time for the market to react.

"If we make a comparison, the monetary policy is more like the traditional Chinese medicine which gradually cures the disease, and the fiscal policy could be regarded as surgery."

Shuang Feng, CRI news.