New government focused on people
By Zhao Renfeng (China Business Weekly)
Updated: 2004-03-10 15:16

There is no need to rush towards dazzling GDP (gross domestic product) growth, but "scientific" development is at the core of economic momentum.

The message, aired from the ongoing second session of the 10th National People's Congress, showcased the basic focus of China's economic plans.

Based on dramatic economic progress of 9.1 per cent last year, China is voicing its hope to moderate and sustain its growth pace, according to experts.

"Great achievements aside, we are happy to learn that the central government is further strengthening and improving macroeconomic control," said Xie Junqi, a member of the 10th National Committee of Chinese People's Political Consultative Conference (CPPCC).

"Stable economic growth is the key," added Xie, who is the deputy director of China Land Surveying Planning Institute of Ministry of Land and Resources.

Premier Wen Jiabao delivers his government work report to the NPC. [chinadaily.com.cn]

Chen Housheng, also a CPPCC member, felt satisfied that the central government is putting the people's interests first, which highlighted the government's attention to the welfare of the common people.

With economic growth at 9.1 per cent, financial strength grew noticeably, foreign trade volume up 37.1 per cent and more than 8 million urban residents employed - economic indicators were very upbeat last year.

Keeping the nation's miracle economy roaring ahead, China's new leadership wrapped up its first year in office with high marks from foreign observers and company executives.

"No government solves all the problems of a country in its first year of office, but Chinese President Hu Jintao and Premier Wen Jiabao already have posted some impressive accomplishments," Brantly Womack, professor of foreign affairs with the University of Virginia, told China Business Weekly.

"The SARS (severe acute respiratory syndrome) crisis was handled decisively and successfully from April of last year, and measures are in place to catch future epidemics at earlier stages. The 9.1 per cent GDP growth in 2003 is amazing considering the disruption caused by SARS."

The deadly epidemic, which lent most Chinese people a palpable sense of crisis during a time of peace, was considered the first notable challenge for the nation's new government.

Experts point out learning how to operate in the global information age during a crisis is always difficult, especially for large organizations like a government.

But successfully tackling the crisis gave much credit to the new government.

"I think it is clear, however, that at least in the eyes of international bodies, like the World Trade Organization (WTO), that the government is in fact learning how to manage issues more proactively, and that doing so will, in many cases, avert serious crises," said David Wolf, managing director of Burson-Marsteller in Beijing, a world's leading public relations and communications counseling company.

On the economic front, many foreign corporate executives show overwhelmingly appreciation for China's efforts to keep the economic stability, particularly when facing the international pressures to revalue the yuan.

"My general impression is that the Chinese Government has done a good job of handling economic matters, including the pressure of dealing with the value of the currency," said Fariborz Ghadar, director of the Center for Global Business Studies at Pennsylvania State University.

Gerard Kleisterlee, chief executive officer of Philips, said during his recent visit to China, "We appreciate the endeavours the Chinese Government made to keep economic stability.

"A stable currency and economic environment are critical for multinational companies to have long-term developments."

Joerg Wuttke, chief representative of BASF (China) in Beijing and chairman of German Chamber of Commerce in China, held the same view. He told China Business Weekly that the German business community is very glad that the Chinese Government does not cave in to foreign political pressure when there is absolutely no reason to revalue the renminbi for economic reasons.

"China's trade is balanced, about 60 per cent of its imports are exported again, and for investors currency stability is very important," said Wuttke.

He said foreign firms have noticed the emphasis on Northeast China. "There is already a lot of German investments, VW, BMW and BASF have sizeable ventures in Jilin and Liaoning provinces. And a new emphasis might add new investments and jobs to this former powerhouse of China."

Foreign firms in China are satisfied with the new government's efforts in fulfilling China's WTO commitments. Wolf said the new government is clearly acting vigorously to implement its explicit commitments.

But he pointed out what is difficult for many new members to the global trading system, however, is managing the expectations of other trading partners that they not only adhere to the letter of their commitments, but also to the spirit and ideology of open and free trade.

"The new government needs to find ways to ensure that what it sees as compliance to its WTO commitments, and what its trading partners see as compliance, are the same thing," he added.

It is widely agreed by experts that the development of China's financial and banking sector has lagged behind the general development of the nation's economy.

They held that the government's steps last year to shore up the competitive edge of China's banks have been bold and resolute.

"As we have learned the hard way in the West, a healthy economy requires healthy banks, and in the end anything that adds to the general strength of the banking sector will have significantly positive effects on the economy," said Wolf.

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