China must press ahead with reforms to help sustain strong economic growth
that has fuelled foreign pressure on its trade and currency policies, a top
government think-tank said in a report published on Monday.
The State Information Centre's report, published in the China Securities
Journal, elaborated on the government's 11th five-year plan, which outlines a
goal of achieving annual average growth of 7.5 percent between 2006 and 2010.
The target, which was approved along with the overall plan by parliament last
week, was not mandatory and merely reflected the need to ensure per-capita GDP
in 2010 is double that of 2000.
In the first five years of this decade, China's GDP grew at an average 9.5
percent a year. In that period, energy consumption was excessive and pollution
got worse, the think-tank said.
"China's economic development has reached a temporary peak and it will be
difficult for it to climb to another peak without carrying out timely
adjustments," the think-tank said.
Foreign countries, responding to China's growing economic might, had
"demanded that China take more responsibility, creating endless disputes over
issues such as the yuan exchange rate, trade and energy development", it
said.
The United States has kept persistent pressure on China to let the yuan rise
faster, despite China's landmark move to revalue the yuan by 2.1 percent in
July.
Sen. Charles Schumer, a New York Democrat, and Sen. Lindsey Graham, a South
Carolina Republican, visit Beijing on Monday to hear first-hand about China's
currency policy, before making a final decision on a bill that threatens a 27.5
percent tariff on Chinese exports to the United States.
Trade Friction
The yuan, which gained 0.24 percent last week, has now appreciated 1.07
percent since the July revaluation. It reached 8.024 per dollar on Monday, its
highest level since the revaluation.
The high comes ahead of a visit to the United States in April by Chinese
President Hu Jintao, during which the U.S. authorities will likely raise their
concerns that the yuan is undervalued giving Chinese exports an unfair advantage
that costs Americans jobs and fuels a large bilateral trade gap.
The think-tank reinforced a pledge by Chinese leaders to rebalance growth by
spurring consumption while reining in investment and called for deeper reforms,
despite resistance from some quarters that sought to protect their "vested
interests".
"Objectively speaking, reforms have run into difficulties and reforms on
medical care and education have created many social problems, promoting some
re-thinks and doubts," it said.
"But China must unwaveringly push reforms since the country cannot overcome
various pitfalls on its road of economic and social development without reforms
and innovation."
A debate over the direction of reform has intensified in recent weeks amid
public concerns over a growing wealth gap and growing medical care and schooling
costs, with some officials worrying about foreign influence as the economy opens
up.
At the end of the annual parliament meeting last week, Premier Wen Jiabao
said there would be no "backpedalling" from market reforms that have brought
China more than two decades of rapid economic growth.
The focus of the government's economic drive is to raise the livelihoods of
800 million Chinese farmers and other struggling groups.