Restructuring will become the major theme when China maps out
its next five-year plan of economic and social development,
according to Outlook, China's most authoritative news weekly.
Today's issue of the magazine notes that the 10th Five-Year
Plan will focus largely on economic restructuring rather than
development.
This view is also
held by Ma Jiantang, director of the National Economy Department
under the State Economic and Trade Commission.
Ma said that after
15 years of rapid expansion, China's economic growth witnessed
a year-on-year decline beginning in 1993, especially noticeable
in the current Five-Year Plan period (1996-2000).
In 1992, China's GDP grew at a rate of 14.2 per cent. The
GDP growth rate slipped to 10.5 per cent in 1995 and was down
to 7.1 per cent in 1999.
The decline of
economic growth has not been short-term, Ma said, adding that
it also should not be attributed to either external factors
or government economic policies, though these have played
some roles.
Ma maintained that
three major intrinsic economic factors are responsible for
China's slowing economic growth.
First, the country's
production capacity for ordinary industrial products has been
excessive. This situation began to emerge as early as the
first years of the Eighth Five-Year Plan period and became
especially evident in the Ninth Five-Year Plan period, Ma
said.
The official noted
that the main propeller for China's previous rapid economic
growth was the shortage of goods. These shortages aroused
huge investment impulses, later creating enhanced production
capacity and higher economic growth.
Yet, when it came
to the early 1990s, the once-hungry domestic market began
to see an over-supply of goods for the first time.
Secondly, advances
in the information economy and technology have led to a decreased
demand for the products of traditional industries, the official
noted.
For instance, the
country's energy consumption for every 10,000 yuan (US$1,200)
of the GDP has dropped by 35 per cent from 1995 to 1998. "This
means that technological advances and the information economy
can't in themselves guarantee the rapid and sustained growth
of the economy," Ma said.
"While new
economic growth spots are fostered in the process, some traditional
growth areas began to be eliminated," he said.
Ma particularly
stressed the importance of restructuring the Chinese economy
in the new century.
"If the country can't adjust to the challenge swiftly,
the macroeconomy will naturally come to a decline," he
said.
Third, the domestic
market for China's leading traditional consumer products has
already become relatively saturated.
Previous development
of the country's consumer markets has suggested that leading
consumer products changed from time to time, Ma said. At one
time in China, bicycles, watches and sewing machines topped
the shopping lists of Chinese consumers. Then came television
sets and refrigerators. Now, computers, cars and apartments
dominate.
However, Chinese
consumers are now very reluctant to open their purses, which
prevents the new consumer goods from becoming driving forces
behind domestic consumption. Since new consumer goods are
more expensive, the capital accumulation process has been
prolonged, Ma said. The decrease of family incomes for a considerable
segment of the population, especially urban laborers and farmers,
also poses an impediment.
"Over the
next five to 10 years, China will remain in a period of readjustment,
with particular efforts to ease the excessive production capacity
and to rid itself of backward equipment and management,"
Ma predicted.
To cope with this
not-so-promising future, Ma proposed that the country step
up restructuring and speed development of new products. In
the meantime, efforts should be made to quicken the shifting
of key consumer products.
(Xinhua 04/03/2000)
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