[Marxism] China's Rapid Economic Growth Remains High on Hu's Agenda

Walter Lippmann walterlx at earthlink.net
Mon Oct 15 13:30:26 MDT 2007

October 15, 2007 12:46 p.m. EDT

China's Rapid Economic Growth
Remains High on Hu's Agenda
October 15, 2007 12:46 p.m.

BEIJING -- Chinese leader Hu Jintao is embarking on his second
five-year term engaged in a difficult balancing act, as he keeps the
government's focus on fast economic growth while also promising to
deliver a more equitable society and a better natural environment.

In a major speech Monday to open the Communist Party's twice-a-decade
National Congress, Mr. Hu said economic growth must remain the
party's "central task." China's per-capita gross domestic product, a
broad measure of the nation's prosperity, has nearly doubled over the
past five years, and was just over $2,000 in 2006. Mr. Hu said the
government's goal is to double that figure again by 2020, and
"basically eliminate" absolute poverty.

While the rapid gains of recent years -- China's economy has grown by
10% or more every year since 2003 -- have made many Chinese better
off, inequality is on the rise and environmental damage has been
severe. "Our growth is realized at an excessively high cost of
resources and the environment," Mr. Hu, who is both the party's chief
and China's president, told more than 2,000 delegates to the party
congress in Beijing's Great Hall of the People.

In order to maintain that expansion without using as many resources,
China's growth in the future will need to be driven more by
improvements in technology and productivity, Mr. Hu said. He outlined
a vision for a major restructuring of the world's fourth-largest
economy, one that would emphasize high technology rather heavy
industry, services rather than manufacturing, and local consumer
spending rather than exports. And to ensure that more people benefit
from economic growth, Mr. Hu said the government will raise minimum
wages, expand health care and the social safety net, and stimulate
the creation of new jobs in the private sector.

Delivering an overall strategy rather than a list of new policies, Hu
spent little time on shorter-term economic issues such as the
direction of China's tightly-controlled exchange rate, or recent
surges in real estate and stock prices. China's benchmark stock
market index, the Shanghai Composite, closed yesterday at a new
record high of 6,030.086 points, up 125% so far this year. Analysts
say government agencies will be rolling out specific policy measures
in coming months, now that the leadership has reached a consensus on
the priorities laid out in Mr. Hu's speech.

"From his focus, you can conclude that the economy, more than any
other issue, will stand foremost in policy-making in the next few
years," said Zhao Xijun, a professor of finance at Renmin University
in Beijing. The emphasis on the environment could mean heavier
financial penalties on polluters, as well as tax incentives for
energy-saving technology, Mr. Zhao said, while the stated desire to
boost household incomes could lead to lower personal tax rates.

More information about the Marxism mailing list