February 1, 2008 |
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No harmful chemicals in exported dumplings to Japan
Source: Xinhua News | Updated: 01-31-2008
No harmful chemicals were found in Chinese dumpling exports involved in a food poisoning incident in Japan, said China's quality watchdog on Thursday.
The General Administration of Quality Supervision, Inspection and Quarantine said tests conducted on two batches of dumplings on Thursday morning show no trace of pesticide remains, such as phosphorus.
At least 10 people in Japan's Hyogo and Chiba prefectures reported stomach ache, vomiting or diarrhoea after eating the dumplings, according to Japanese media.
Tests had been carried out on raw materials like ginger and cabbage used in the dumplings before exportation, which showed the products safe for eating, according to the administration.
The administration said it has demanded the producer of the dumplings, the Tian Yang company in north China's Hebei Province, recall all products in and on the way to Japan immediately.
Local public security forces were invited to join the investigation, while China will send experts to Japan for cooperation in resolving the issue, said the administration.
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China Intensifies Relief Work for Disaster-hit Areas
Source: Xinhua News | Updated: 01-31-2008
China has stepped up relief work for areas affected by ice and snow by mobilizing women's and youth organizations and military forces. The government also offered help to Taiwan compatriots and businessmen on the mainland who have been affected by the weather.
Premier Wen Jiabao on Wednesday visited passengers stranded at the railway station in the southern city of Guangzhou. He promised them that the government would do its best to ensure they got home for lunar New Year.
Heavy snow and icy rain falling since since Jan. 10 have brought traffic to a standstill at peak season, when millions of Chinese are on their way home to celebrate the Spring Festival.
The State Council announced on Wednesday that the central government would offer help to Taiwan compatriots and businessmen on the mainland who were also affected.
"The Taiwan Affairs Office is looking for Taiwan enterprises suffering snow disasters and would provide the maximum possible help to them," Yang Yi, a spokesman of the Taiwan Affairs Office of the State Council, told a regular news conference.
The All-China Women's Federation (ACWF) has donated more than 4 million yuan (530,000 U.S. dollars) to areas affected by snow-related disasters in central and southern China.
Women's organizations across the country were urged to provide aid to women and children from poor families in those areas, according to a circular issued by the ACWF on Tuesday.
The Central Committee of the Chinese Communist Youth League (CCYL) granted membership dues to support its members' disaster relief activities in nine provinces, autonomous regions and municipalities.
The nine areas seriously affected by snow and ice included Hunan, Hubei, Guizhou, Anhui, Jiangxi, Gansu and Sichuan provinces, the Guangxi Zhuang Autonomous Region and Chongqing City.
The CCYL also urged its members in disaster-stricken areas to help with disaster relief and emergency aid work.
The Chinese People's Liberation Army (PLA) handed out 419,000 quilts and 219,000 cotton-padded coats in response to a plea for help from the State Disaster Relief Committee. The PLA's General Staff Department and the General Logistics Department searched military warehouses across the nation for quilts to send to storm-hit areas.
Meanwhile, traffic is slowly improving in southern Chinese provinces hit by the worst winter weather in five decades. Thousands of passengers, however, were still trapped on icy highways, the Ministry of Public Security said on Wednesday.
The north-south trunk road remained blocked at several sections. On expressways in central Hunan and Hubei provinces and southern Guangdong Province, traffic began to move slowly. But on the highway linking the eastern Anhui Province with neighboring Zhejiang Province and in eastern Jiangxi Province, many vehicles and people were stranded.
However, traffic movement in the southern Guangxi Zhuang Autonomous Region has been totally restored.
Unusual cold, heavy snow, sleet and ice rain has hit 14 provinces in central and south China in the past two weeks. More than 77.8 million people had been affected by Monday afternoon, with 38 people killed since Jan. 10, according to the Ministry of Civil Affairs.
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Domestic consumption drives GDP for 1st time
Source: Shanghai Daily | Updated: 01-31-2008
China's domestic consumption has replaced investment to become the biggest driver of economic growth for the first time in seven years.
Last year, domestic consumption contributed 4.4 percentage points to the 11.4-percent increase in the nation's gross domestic product, compared with 4.3 percentage points of investment and 2.7 percentage points of net exports, said China Securities Journal yesterday, citing unidentified official with the National Bureau of Statistics.
Data released earlier showed the nation's retail spending rose 16.8 percent to 8.92 trillion yuan (US$1.24 trillion) in 2007, up 3.1 percentage points from a year earlier.
Fixed asset investment expanded 24.8 percent to 13.72 trillion yuan, 0.9 percentage point higher compared with a year ago, while the trade surplus grew 47.7 percent to US$262.2 billion, 26.3 percentage points slower in pace.
"The rise of domestic consumption is the result of many years of efforts to support spending while curbing investment, with a goal to reduce dependence on external factors," said Ba shusong, a researcher with the State Council Development Research Center.
Since the Asian financial crisis in 1997, China has earmarked a strategy to reduce reliance on investment and exports and turn to consumption through tax cuts, minimum wage rises and improved education, welfare and health care.
But investment had still remained a leading driver of economic development despite various efforts in the past decade.
In 2006, investment contributed 4.6 percentage points to GDP growth, 0.3 percentage point higher than consumption.
Zhang Xinfa, an analyst with China Galaxy Securities Co, estimated consumption will contribute more to the economic growth in the future.
However, some analysts suggested that higher consumption growth does not mean a weakened investment sector.
"In five years at the minimum, investment and exports will still be major contributors to China's economic growth, at least of parallel importance to consumption," said Li Maoyu, an analyst with Changjiang Securities Co.
Last year, disposable income for city dwellers jumped 17.2 percent to 13,786 yuan and earnings for rural households rose 15.4 percent to 4,140 yuan, according to official data.
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China to continue talk with Sudan on Darfur issue
Source: Xinhua News | Updated: 01-31-2008
China will continue to discuss with Sudan on the issue of Darfur, Chinese Foreign Ministry spokesman Liu Jianchao said here Thursday. China will also make necessary negotiation and cooperation with the world community on issues related to Darfur, Liu added. Liu said China's position on the Darfur issue is very clear, and its starting point is to push forward the reconciliation process in the region so as to ease the humanitarian crisis and restore stability and development in the region and help people there to get rid of the difficulties in their life.
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Kim Jong Il meets senior CPC official
Source: Xinhua News | Updated: 01-31-2008
Kim Jong Il, the top leader of the Democratic People's Republic of Korea (DPRK), met here Wednesday with Wang Jiarui, head of the International Department of the Communist Party of China (CPC).
Kim told Wang that the DPRK highly values the friendship with China, saying the bilateral relationship has been developing smoothly.
He said the DPRK is willing to work with China to increase communication and coordination and push forward the DPRK-China relations.
Both sides discussed the nuclear issue on the Korean Peninsula. Wang said positive development has been made in six-party talks, calling for the "full implementation" of the existing agreements on the issue.
He expressed the hope that all parties concerned should continue to take positive steps and fulfill their commitments to push forward the six-party talks and denuclearization on the Korean Peninsula.
Kim said the DPRK's stance on fulfillment of commitment under the six-party talks remains unchanged, adding that the parties concerned should fulfill their commitment under the principle of " action for action."
Kim told Wang that the DPRK will cooperate with China to push forward the full implementation of agreements.
Wang arrived in Pyongyang on Tuesday for a visit till February 2.
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FM spokesman: Taiwan, Nansha Islands all Chinese territory
Source: Xinhua News | Updated: 01-30-2008
Taiwan, Nansha Islands and adjacent waters are all inseparable parts of Chinese territory, a foreign ministry spokesman said here Tuesday.
Liu Jianchao made the remarks at a regular press conference when asked to comment on Taiwan "leader" Chen Shui-bian's planned trip Saturday to Taiping Island, the largest among Nansha islands.
Liu reiterated that China possesses indisputable sovereignty over Nansha Islands and adjacent waters.
"We have confidence as well as capability to safeguard the country's sovereignty and territorial integrity", Liu said, adding China remains committed to maintaining peace and stability in the South China Sea.
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CPC leader commits to take China-Japan ties 'to new level'
Source: Xinhua News | Updated: 01-30-2008
A leader of the Communist Party of China (CPC) voiced a commitment here on Tuesday to boost cooperation with Japan and take bilateral relations to a new level.
Li Keqiang, a member of the Standing Committee of the Political Bureau of CPC Central Committee, called on the two sides to seize the historical opportunity to expand friendly exchanges and deepen cooperation, increase mutual understanding and push forward the China-Japan strategic relationship and reciprocal relations.
China-Japan relations are entering an important stage of development, Li said in his meeting with the policy consultants of the new 21st Century Committee for China-Japan Friendship.
He also stressed that lasting stable and healthy relations between the two Asian neighbors not only served the fundamental interests of the two countries and two peoples but were conducive to the peace, stability and development of the region and the world at large.
Policy consultants from both countries gathered in Beijing on Sunday for the 7th meeting of the committee.
The two-day meeting focused on how to implement the consensus reached during Japanese Prime Minister Yasuo Fukuda's visit to China last month and on Chinese President Hu Jintao's upcoming trip to Japan.
Yotaro Kobayashi, the chief Japanese member of the committee, expressed his appreciation of the recent comprehensive development of bilateral relations.
He pledged that Japan would support China's peaceful development and actively promote bilateral cooperation in fields such as environmental protection, energy utilization and exchange between younger generations.
The new 21st Century Committee for China-Japan Friendship is a policy consultation organization for the two governments. Its goal is to bring together intellectuals from both sides to study relations from a broad political, economic, cultural, scientific and technological perspective, and make proposals to both governments.
The committee has held six meetings since its inception in July 2003, based on the consensus of the leaders of the two countries.
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China willing to talk with Japan on sea issue
Source: Xinhua News | Updated: 01-29-2008
China is willing to continue its active consultation with Japan on the East China Sea issue, Chinese Foreign Ministry spokeswoman Jiang Yu said here Tuesday.
Jiang made the remarks when asked to comment on whether the issue could be resolved during Chinese President Hu Jintao's visit to Japan this spring.
She said China hopes to work with Japan in deepening cooperation in various fields and is willing to discuss with the Japanese side on Hu's upcoming visit.
"China will maintain the process and momentum of the consultation based on sincerity and active attitude, and try to seek an early settlement of the issue with the improvement of bilateral ties," Jiang said.
China and Japan have convened 11 rounds of talks on the East China Sea issue. The two sides had reached four new consensus on the issue during talks between Chinese Premier Wen Jiabao and Japanese Prime Minister Yasuo Fukuda last month.
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Chinese army goes all out to fight against snow chaos
Source: Xinhua News | Updated: 01-29-2008
The Chinese People's Liberation Army (PLA) has ordered its troops to go all out to combat the lingering heavy snow in the southern part of the country.
The PLA's Department of General Staff and General Political Department issued a joint decree on Monday, ordering troops in the affected areas to join in the anti-snow battle in collaboration with local governments.
The troops should give whatever assistance local governments require for fighting disaster and in rescuing people, the order said.
So far, 158,000 PLA troops and the Chinese People's Armed Police (PAP) and 303,000 paramilitary members have joined the anti-snow campaign.
The current heavy snowfall has caused unexpected difficulties to local life, production and transport in the affected areas and the country as a whole.
So far, heavy snow and rain have left at least 24 dead and caused enormous financial and property loss.
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Disease control center of Nanjing MAC well prepared for Olympic security work
Source: PLA Daily | Updated: 01-31-2008
The Center for Disease Prevention and Control (CDPC) of the Nanjing Military Area Command (MAC), dubbed as "vanguard in treating and warding off disease", is charged with special medical treatment and rescue missions all the year round. It participated in the support missions for major events such as the APEC Shanghai Meeting, the Shanghai Cooperation Organization Summit and the Special Olympics World Games. It will soon send people to Shanghai to make preparations for medical support missions at some competition venues in Shanghai of the 2008 Beijing Olympic Games.
The officers and men of the CDPC are deeply aware that the success of the 2008 Beijing Olympic Games concerns China's reputation, hence security preparations must be made diligently without the slightest carelessness. Those who carry out security and medical support at venues would serve as "eye" and "brain" for the medical support strength while pathogen investigative test and quarantine vehicles at the venues would look like mobile laboratories. The test results obtained from these vehicles will directly affect the medical treatment plans to be formulated by medical institutions and concerns health and life safety of numerous people.
During Olympic security training, the CDPC has established joint training mechanism as well as joint command group with related civilian medical care and security organizations to carry out regular joint medical care rehearsals aimed at coping with various contingencies during the 2008 Beijing Olympic Games. In addition, the center has also established an information sharing mechanism with local medical care and security organizations to upgrade joint security operation capabilities.
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Frontier defense patrol information system successfully developed
Source: PLA Daily | Updated: 01-30-2008
Two patrolmen of the Ala Mountain Pass Frontier Defense Company of the Xinjiang Military Area Command were caught up in a snowstorm when they were on foot patrol on January 26. They promptly sent signals to the information monitoring and control center of the higher level to ask for help. Guided by frontier defense patrol information system, they swiftly ascertained their location and returned to their company safely.
Xiang Xingmin, director of the Military Geographical Office of a survey and mapping information center of the Xinjiang Military Area Command, together with five of his fellow engineering technical personnel, successfully developed the frontier defense patrol information system that integrates various functions including long-range video monitoring and control system, with the support of comprehensive information network of the PLA. The system has won the second prize of the Military Scientific and Technological Progress Award. Through the system, soldiers on patrol can get contact with the information monitoring and control center of the higher level by communication equipment they carry with them in case of emergencies, and will be able to receive response from the monitoring and control center of the higher level within seconds.
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Chang'e I captures pictures of moon's polar areas
Source: Xinhua News | Updated: 01-31-2008
China's first lunar probe, Chang'e I, has successfully captured pictures of the moon's polar areas, the Commission of Science, Technology and Industry for National Defense said on Thursday.
The satellite has been carrying out explorations for nearly three months since it entered the orbit which is about 200 kilometers above the moon on November 7.
China published the first picture of the moon captured by the satellite on November 26.
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China advocates prevention of space arms race
Source: Xinhua News | Updated: 01-29-2008
China will actively push for the signing of an international legal document on preventing arms race in outer space during the Disarmament Conference in Geneva, Chinese Foreign Ministry spokeswoman Jiang Yu said here Tuesday.
The first 2008 session of the United Nations-sponsored Conference on Disarmament?began?in Geneva in January 23. Wang Qun, Chinese Ambassador for Disarmament Affairs, led the Chinese delegation to attend the conference.
"China advocates to peacefully utilize the outer space and opposes weaponization and arms race in the outer space," Jiang said.
China has not and will never participate in outer space arms race, She added.
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China becomes world's 2nd largest gold producer
Source: Xinhua News | Updated: 01-30-2008
China produced 270.29 tons of gold last year, up 12.67 percent from 2006, which made it the world's second largest bullion producer, statistics from the China Gold Association show.
The largest producer was South Africa, whose output was just two tons more than China.
According to the National Development and Reform Commission, from 2006 to 2010, China's gold production target is 1,300 tons. During that period, China also aims to increase its gold base reserve by 3,000 to 3,500 tons.
"South Africa has been the biggest gold producer since 1905. However, China is going to challenge its position," said gold analyst Zhou Hongtao.
China's gold output for the first time reached 100 tons in 1995 and doubled that amount by 2003. In the past five years, China's gold production rose 34.84 percent.
New discoveries have paved the way for China's rise in output, with five big mines found in China last year. Meanwhile, other traditional producers, including South Africa, the United States and Australia, reduced their output in recent years.
China was the fourth largest gold producer from 2000 to 2006.
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China's January CPI expected to rise 6.5%
Source: Xinhua News | Updated: 01-31-2008
Despite heavy snow in most of China's south, the country's consumer prices may grow 6.5 percent in January, roughly the same as the December rise, Chen Xiwen, Office of the Central Leading Group on Rural Work director, said on Thursday at a State Council press conference.
"The storms have had a severe impact on agricultural production, mostly in the south. The impact on fresh vegetables was catastrophic in certain areas," he told reporters.
"But considering most of the winter grain crops are grown in the north, the supply of grain, pork and edible oil nationwide largely remains intact," said Chen, who added oil crops in the middle and lower reaches of the Yangtze River were "seriously" affected.
"As for the impact on the whole year's grain production, we still have to wait and see. We are not sure how long the storms would last or whether it would move to the north," he said.
"If the storms aggravate or expand, China's agricultural production would be affected seriously."
China's consumer price index (CPI) rose 4.8 percent in 2007, with food prices, especially pork, as the major cause of the increase. CPI figures are routinely released by the National Bureau of Statistics.
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Citigroup: No harsher property tightening
Source: China Daily | Updated: 01-30-2008
China is unlikely to further tighten its grip on the real estate industry as previous policy measures are now kicking in, predicted Citigroup in a report on Wednesday.
As a key driver of the world's fourth largest economy, China's housing sector has experienced a spectacular run in the past few years, prompting concerns of bubbles. If and when they burst will spell trouble for banks - the most important funding source for developers - and the overall economy.
That is part of the reason why the central bank hiked interest rates six times and raised the bank reserve requirement 11 times since the start of 2007. In addition, regulators told banks to cut back on loans to property developers and demand buyers of second apartments to pay a higher down payment and a higher interest rate.
These measures have produced appreciable results, indicated by frequent reports on housing price drops in some big cities, especially in Shenzhen and Guangzhou, both in South China's Guangdong Province.
"Overly tightening and a slump in housing prices will bring about negative effects on China's banking system and the broader economy," Citigroup said in its report.
Independent economist Andie Xie agreed. "Many firms are using land as collateral when borrowing from banks. However, land prices will drop," he said, urging investors to think twice before buying bank shares.
Xie's concerns may partly explain the poor performance of bank shares in the mainland equity market, with the biggest lender, Industrial and Commercial Bank of China losing more than 20 percent in half a month.
On Wednesday, all banks closed in negative territory. Industrial Bank plunged 8 percent, followed by a 5.8 percent fall in China Merchants Bank, the country's biggest credit card issuer.
Property shares hardly fared better. China Vanke, the country's biggest listed property developer has lost more than 18 percent since January 15.
The combined performances of bank and property shares weighed on the broader equity market. The Shanghai Composite Index dived more than 25 percent since January 14. In developed markets, a fall of 20 percent or more within a 12-month period can be called the start of a bear market.
Such a big fluctuation does not surprise Andie Xie. "The A-share market will face a major test this year, and will suffer from big fluctuations," he told a recent financial forum.
He expected the market to fall further. "There are indications," he said.
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Chinese currency hits new high against US dollar
Source: Xinhua News | Updated: 01-31-2008
China's currency, the yuan, hit a new high against the US dollar on Thursday, following an overnight key interest rate cut in the United States.
The yuan, also known as the renminbi, went up 145 basis points from the previous day to a central parity rate of 7.1853 yuan to one dollar, breaking the 7.19 mark.
The Federal Reserve on Wednesday cut US interest rates by a bold half-percentage point as part of its efforts to shore up economic growth.
The move came just eight days after the US central bank slashed rates by three quarters of a percentage point, leading the dollar to weaken against other major world currencies.
The Chinese currency had appreciated against the greenback by about 12 percent since a new currency regime was imposed in July 2005 to revalue and de-peg it from the dollar.
It had climbed 6.9 percent against the dollar in the past year, but some US critics say it remains undervalued, giving Chinese exporters an unfair advantage and resulting in the massive trade imbalance between the two countries.
China was not against revaluation of the yuan, but opposed "excessively rapid" appreciation that was inappropriate to its national conditions, Commerce Minister Chen Deming said last month.
Premier Wen Jiabao also said China would improve the yuan's exchange rate mechanism in a controllable and gradual manner, let the market play a bigger role in the mechanism and enhance the currency's flexibility.
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Emergency Coal Shipped to Power Plants in Blizzard-Stricken South China
Source: Xinhua News | Updated: 01-31-2008
North China's coal-rich provinces and regions are gearing up production and shipping emergency supplies to the country's southern areas plagued by persistent blizzard.
Shanxi Coking Coal Group, a major producer in the northern province, has increased its coal production by 20 percent in the past few days. The coal currently makes up 60 percent of its total shipment, up from 40 percent during normal times.
Since Jan. 25, shipments of the coal have been multiplied by 200,000 tons by Taiyuan Railway Bureau. A total of 13,000 train carriages were loaded with the coal each day, 3,000 more than usual.
The Inner Mongolia Autonomous Region has produced 32 million tons of coal so far this month, four million tons more than the same period last year. Additionally, it has used two million tons of reserve coal to supplement stock at power plants in southern provinces.
Wang Liming, a Hohhot Railway Bureau official in charge of coal shipments, said 3.7 million tons of coal were transported via rail in January. Over the past five days, 180,000 tons were shipped daily.
Authorities said major railways in north China have all given priority to the transport of electricity coal. Shipment of other commodities, except grain, cooking oil, basic foods, fertilizers and refined oil, should all give way to trains loaded with the coal.
Most of China is currently in dire need of power amid severe disruptions caused by the prolonged snow, rain and cold weather.
Blocked roads and railways have hampered coal shipments on rail lines in the southern areas. Most power plants in the southern Guangdong Province, which has only two days of coal supply left, have resorted to shipping in emergency supplies.
About 4.5 million tons of coal is expected to arrive at the Guangzhou port from north China's Bohai Bay in a fleet of 125 cargo ships. Some of the vessels had canceled their international missions to assist in the shipment.
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Frozen section of Yellow River extends farther, ice runs worsened
Source: Xinhua News | Updated: 01-31-2008
The frozen sections of the Yellow River has expanded to more than 1,100 kilometers as temperatures remained very low in areas along the river.
An official with the Yellow River Conservancy Committee (YRCC) said the frozen sections have spread in the upper, middle and lower reaches of the river, making the situation for preventing ice runs grave.
River freezing can pose a hazard to the safety of embankments along some narrow and winding sections, where a large amount of ice often accumulates in cold weather.
The river section upstream of Qingtongxia water control facility inside Ningxia Hui Autonomous Region has been frozen since late January under the impact of a sustained low temperature, which has hovered around minus 20 or so degrees Celsius.
The water level has risen abruptly in the waterway in Zhongning County as a large amount of ice has built up and clogged the natural course of the water.
On Monday, in four places, water flowed over levees or flowed through holes built in the embankments, inundating 1,340 hectares of arable land or tidal zones.
Dozens of residents were forced to evacuate.
Flood control officials in Ningxia and Zhongning lost no time in organizing manpower to solidify and raise the height of the levees and plug holes in the dikes.
Weather forecasts predict the cold weather will stay for several more days to come in the Yellow River Valley.
The Yellow River Conservancy Committee has told local departments to step up patrols along the riverside, watch the weather and ice flows closely so that efficient measures can be adopted in case of new crises.
The Yellow River, the second longest in China, originates in Qinghai Province, northwest China, flows through Gansu Province, Ningxia Hui and Inner Mongolia autonomous regions, Shaanxi, Shanxi, Henan and Shandong provinces before emptying into Bohai Sea.
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Cities join WWF to cut carbon use
Source: China Daily | Updated: 01-29-2008
Shanghai and Baoding have become the first cities to take part in a new WWF (World Wide Fund for Nature) initiative to research less carbon-intensive paths to urban development in China, the international environmental organization said.
The Low Carbon City Initiative will initially focus on energy efficiency in buildings, renewable sources of energy and the manufacturing of energy-efficient products.
The participants plan to show how rapid economic growth and energy consumption can be separated in order to reduce the environmental effect of carbon dioxide emissions and growing energy consumption.
"Cities are an important part of China's economic development, but many face problems such as low energy efficiency and degraded environmental quality," Li Lin, head of conservation strategies at WWF-China, said.
"The Low Carbon City Initiative is about finding a sustainable development mode for China's urban areas through the study of energy production and usage patterns and developing new economic approaches for cleaner growth."
The WWF will collaborate with Shanghai in measuring energy use in selected public buildings such as offices, hotels and malls.
The data they gather will then be audited and made public, and training programs will be carried out to encourage energy efficiency in public buildings.
The WWF will also help conduct policy research to promote greener construction and set up demonstration projects in Shanghai.
In Baoding, a northern city about two hours' drive from Beijing, the WWF will support the design and implementation of sustainable development projects such as a solar energy demonstration city and a production base for renewable energy sources.
In addition, the group will support the creation of a network for information exchanges on policy matters, technology cooperation in the use of renewable energy, investment promotions and exports of renewable energy products.
The WWF will also promote clean development policies, demonstrate best practices and carry out energy-saving campaigns in other cities throughout China.
"Exploring the path to less carbon-intensive urban development is promising yet challenging, and requires more participation and support from governments, research institutes, companies and international organizations," Li Junfeng, deputy director of the Energy Research Institute at the National Development and Reform Commission, said.
"We hope the Low Carbon City Initiative will forge effective collaboration contributing to China's goal of reducing energy consumption by 20 percent between 2006 and 2010."
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Pressure on dwindling land banks predicted to rise again
Source: China Daily | Updated: 01-31-2008
Demand for land might increase following the ongoing local government reshuffles, putting more pressure on depleted resources, Land and Resources Minister Xu Shaoshi said yesterday.
Once the leadership reshuffles are completed governments "might bring forth new ideas and plans for development, which will inevitably lead to a new round of high demand on resources," Xu said at the ministry's annual conference.
Illegal land acquisitions previously uncovered by the ministry mainly involved unauthorized expansions and the use of farmland for non-agricultural purposes.
Such practices have become rampant with the country's smoldering industrial and housing sector, and the strict arable land protection policy, he said.
In a bid to ensure legal land acquisitions, Xu said an intradepartmental network mechanism will be set up between judicial and administrative government agencies to curb and punish violators, with participation from local governments, courts, procurators, public securities and supervision organs.
The ministry is currently working with the Ministry of Supervision to tackle corruption and rule violations in land-leasing cases, officials said.
A 100-day campaign, which ended last month, was the major undertaking of the two ministries to curb local governments illegally transferring household land to developers.
More than 2,700 officials, alleged to have been involved in 31,000 land use violation cases, will face prosecution following investigations.
Earlier, Ministry of Land and Resources Vice-Minister Gan Zangchun said the ministry will cooperate with industrial and taxation authorities to make it impossible for violators to register the transactions or secure bank loans.
As well as curbing illegal land use, over the past five years, the ministry has reclaimed 1.53 million hectares of arable land by re-cultivating deserted land, Gan said.
The government has set a minimum requirement for arable land of 120 million hectares. The current bank amounts to 121.8 million hectares, so it will be a "very demanding task to achieve the goal", he said.
However, experts have warned that without a change to the economy-oriented development model, land protection will remain tough.
"Land is a very convenient resource for local governments to use in managing and facilitating development," Kong Xiangbin, an associate professor at China Agriculture University, said.
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No.1 central document focuses on rural issues
Source: Xinhua News | Updated: 01-31-2008
China promulgated Wednesday its first document for this year, calling for greater efforts to address rural problems when the nation, with a rural population of 900 million, is combating mounting inflationary pressure and striving for sustained, rapid and healthy economic growth.
The first document, issued by the central committee of the Communist Party of China and the State Council every year, is dubbed the No.1 central document. This is the fifth year in a row in which the No. 1 central document focused on rural problems. The keynote for this year is consolidating the foundation of agriculture.
In the previous four No. 1 documents, the key phrases were increasing farmers' income (2004), improving agricultural production capacity (2005), pushing forward the "new countryside" scheme (2006) and developing modern agriculture (2007).
China's consumer price index (CPI) rose 4.8 percent last year, with the inflation indicator hitting an 11-year-high of 6.9 percent in November, well above the government target of 3 percent.
Since food has a weighting of 32.74 percent in the CPI, the stable supply of such commodities, farm produce in particular, will be a decisive factor behind China's efforts to curb inflation.
China harvested 500 billion kilograms of grain in 2007, achieving production growth for the fourth year in a row. However, Agriculture Minister Sun Zhengcai said that output failed to meet domestic demand for the year.
Official statistics show that over the past decade, China's population increased by 90.59 million, but per-capita grain supply decreased from 412 kg in 1996 to 378 kg in 2006. Meanwhile, 210 million of the 900 million rural population began to work for urban and township enterprises. This shift meant fewer people who produce grain and more people who only consume.
Under these circumstances, the key to ensuring food supplies lies in endeavors to consolidate the base of agriculture.
FORTIFYING BASE OF AGRICULTURE
The No. 1 central document ordered that an enduring mechanism for consolidating the base of agriculture should be quickly developed; great importance should be attached to grain production, and supply and demand for major farm products should be balanced with product safety guaranteed.
To achieve these goals, the document stressed that any increased spending on agriculture this year should be clearly higher than last year, the increase in fixed-asset investment in rural areas should exceed the year-earlier level and farm subsidies should be raised.
Observers here said that given continuous, substantial growth in tax revenues, China was financially powerful enough to let industry support agriculture and cities support rural areas.
According to Han Jun, head of the rural department of the Development Research Center of the State Council, in 2007 China injected 42.7 billion yuan (5.9 billion U.S. dollars) into rural areas as direct subsidies for grain production and the purchase of agricultural inputs, up 63 percent from 2006.
Last year also saw the central government spend 36 billion yuan, including money raised through treasury bonds, on improving living and production conditions in rural areas. The total included 30 billion yuan on road construction, water and electricity supplies.
Another 1 billion yuan went to small irrigation projects and 3.2 billion yuan to revamping reservoirs.
SEEKING WAYS TO INTEGRATE URBAN WITH RURAL AREAS
Observers believed the integration of urban and rural areas would be the ultimate solution to yawning disparities between both regions and their people.
An increase in farm incomes has for years remained at the top of government concerns.
There is still an impoverished rural population of just over 20 million, even though it dropped from more than 250 million some three decades ago.
According to data from the National Bureau of Statistics, per-capita disposable income was 13,786 yuan in urban areas last year, up 17.2 percent, or 12.2 percent in real terms, while per-capita income was 4,140 yuan in rural areas, up 15.4 percent, or a real 9.5 percent.
China is seeking ways to unite development strategies, distribution of different trades and infrastructure construction for both urban and rural areas. New policies were needed to integrate employment and social management and equalize basic public services in urban and rural areas.
In terms of public services, according to the No. 1 central document, textbooks would be provided free for students under compulsory education in all rural areas, subsistence allowances should increase for boarders from low-income rural families and more such students should be covered by the service, and subsidies should be raised for public funds and teaching building maintenance fees of primary and middle schools in rural areas.
The quality of teachers in rural primary and middle schools should be raised and college graduates would be encouraged to teach at such schools.
This year, the new rural cooperative medical care system would expand to cover all rural residents and government spending on the system would be increased, according to the document. It said construction of medical service networks should be reinforced and pharmaceutical supply for rural areas should be supervised.
A social welfare system should be built and improved for all rural areas and more should be spent on poverty relief, the document added.
Observers said they believed that land-use rights transfers and the declining number of peasants who were confined to the land through such transfers would be key to the integration of urban and rural areas and hence the narrowing of disparities.
According to the document, the basic system for rural operations and land contract relations will be stabilized and improved. The market for transferring land contract and management rights will be improved in line with the law and on a voluntary, compensated basis.
Some experiments with the land contract and management right transfer market have been conducted in some areas.
Leng Gang, the former party head of Shuangliu County in Chengdu, the capital of the southwestern Sichuan Province, said his county encouraged arable land to be held by large-scale farmers to support the development of efficient modern agriculture and economies of scale.
Peasants were encouraged to lease land and benefit from such leases, and they could either work for large-scale farmers or find paid jobs outside their hometowns. Manufacturing and service industries were being expanded to provide more jobs for peasants who abandoned their land use rights and apartments would be built for them in urban areas.
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China to expand urban medical aid nationwide
Source: Xinhua News | Updated: 01-30-2008
China will expand its urban medical aid system to the whole country in the first half of this year, said Wang Zhikun, an official with the Ministry of Civil Affairs on Tuesday.
China started to experiment with an urban medical aid system in 2005, under which government subsidizes urban low wage earners when they are sick and unable to afford to go to hospital.
By now, the system has been set up in 2,560 counties, accounting for 89 percent of all counties. While in China's rural areas, a similar subsidy system has already been set up.
In Guiyang of southwest China's Guizhou province, for example, urban low wage earners can apply for a special medical aid if the medical charges are more than 800 yuan (about 106.67 US dollars) in a year.
These measures have made it is easier for more than 51,000 low wage earners in the city to receive medical care.
Wang, who is deputy director of the ministry's minimum living level guarantee department, said funds allocated from financial departments, welfare lottery and public donation will jointly contribute to the aid system together.
Soaring medical costs in recent years have plunged many rural and urban Chinese back into poverty as a result of the government's failure to implement an adequate medical insurance network after it cut subsidies for medical costs in 1992.
China plans to reform the present system so that common people can enjoy universal basic services at reasonable prices, and China's long-awaited reform plan for its health care system will be released in March shortly after the top legislature's annual session, said Health Minister Chen Zhu earlier this month.
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China to issue IPR strategy in 2008
Source: Xinhua News | Updated: 01-31-2008
After two and a half years of preparation, China plans to release its national intellectual property rights (IPR) strategy this year, according to the State Intellectual Property Office.
The strategy will have three stages: information, services and trade, said Tian Lipu, head of the office, during a conference on Tuesday.
The strategy began to be mapped out in July, 2005. So far, China has drawn up 20 methods to protect IPR, including improving the protection system, strengthening law enforcement and raising public awareness.
"The strategy is vital to fully implementing the power of the country's intellectual property rights system and to promote the development of the country's economy and science," Tian said.
Tian noted that in 2007, China saw significant progress in protecting IPR in various areas, industries and companies.
Organizations for guiding the strategy were set up in 17 provinces, autonomous regions and municipalities. Guangdong, Guizhou, Shandong and Shanghai municipality have already issued their own strategies.
China will set up about 40 service centers for IPR protection. The centers will provide consultations and financial support for those who can't afford to pursue cases.
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China issues emergency circular on food safety
Source: Xinhua News | Updated: 01-30-2008
China's food watchdog issued an emergency circular on Wednesday to ensure food safety in the face of severe winter weather that has blocked transport and endangered supplies in much of central, eastern and southern China.
The State Food and Drug Administration (SFDA) ordered all the local food and drug bureaus to tighten inspections of food production and sale facilities so as to prevent inferior or fake food from entering the market.
The snow, the heaviest in decades in many places, has been falling in China's east, central and southern regions since Jan. 10, causing building collapses, power blackouts, highway closures and crop destruction.
The SFDA ordered all local bureaus to maintain food market order and to prosecute law violations, noting supplies of some foods was already tight.
The extreme weather in the past two weeks hit as Chinese travelers began one of the world's biggest annual mass migrations for the Chinese Lunar New Year, or the Spring Festival, the most important festival for Chinese family gatherings.
The SFDA also ordered local bureaus to promptly report and tackle emergencies and prevent mass incidents of food poisoning.
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China to strictly regulate TV advert order during Spring Festival
Source: Xinhua News | Updated: 01-30-2008
China's State Administration of Radio, Film and Television (SARFT) has issued a notice to regulate radio and television adverts during the upcoming Spring Festival.
The seven day Lunar New Year season has been the Chinese traditional holiday for family reunion, a time when most stay at home watching TV programs together.
The SARFT requested all radio and television stations put social effects at the forefront and strictly follow regulations on adverts. False ads for drugs, sex-related health supplements and drugs for sexually transmitted diseases were banned.
The notice also bans broadcasting ads during TV dramas and films and overtime advertising.
The SARFT reiterated all broadcasting institutions must monitor TV or radio programs during the holiday.
New data revealed that more than 3,000 adverts judged to be sexually suggestive or false had been revised or removed from TV and radio broadcast across China last year.
"Radio and TV stations across the country have examined their broadcasting lists and the months of efforts to crackdown on illegal ads have taken effect," the SARFT said.
In addition, more than 1,300 TV stations in over 400 prefectural level cities and radio stations in some 100 prefectural level cities were put under monitoring to spot banned ads, according to the SARFT.
Earlier this month, China's press and publication regulator issued a notice announcing the launch of another nationwide crackdown on "vulgar" video and audio products.
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China sees rise in economic crimes in 2007
Source: Xinhua News | Updated: 01-30-2008
Although the total number of criminal cases leveled off last year, there were 84,000 economic crimes, up 4.2 percent year-on-year, according to the Ministry of Public Security.
Among the economic offenses, violations of company regulations and financial misconduct led the increase, rising 15.4 percent and 14.3 percent respectively, from 2006.
"As the economy has developed quickly in recent years, economic crimes have become more frequent," Wu Heping, a spokesman with the ministry, told reporters on Wednesday.
He said that 2007 was the fourth year in a row during which China had seen a marked increase in economic crimes.
As for other offenses, there were 4.75 million criminal cases in 2007. Serious crimes such as bombings, arson, murder, rape and abduction dropped, with bombings down 25.2 percent year-on-year, said the ministry.
"In 2007, public security departments at all levels strengthened their front-line police efforts to improve social security," said Wu.
The number of traffic accidents dropped by 13.6 percent year-on-year to 327,000, killing 81,000 people and causing direct economic losses of some 1.19 billion yuan (about 160 million US dollars).
Wu noted that last year, crimes committed by teenagers and the jobless fell by 1.2 percent and 2.9 percent, respectively, from 2006.
As the New Year festival neared, criminals might become more active, said Wu, and he warned the public to take necessary precautions.
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Report: almost half of China's older city dwellers live alone
Source: Xinhua News | Updated: 01-30-2008
Some 49.7 percent of city dwellers aged 60 or above live alone, according to
a recent report.
"As the country's population is aging, more old people are
in need of long-term care, which includes daily care, mental support, emergency
aid, hospice care and many other types of care," Guo Haoming, a senior official
with the Chinese Association for Life Care, said on Tuesday.
The report from the China Elderly Work Committee Office said that as of the end of 2006, the number of those aged 60 and above was 149 million, or 11.3 percent of the population.
Guo said that service industries for the aged had started very late in China and the number of organizations for nursing and hospice care was far less than adequate.
According to Guo, the number of people aged above 80 accounted for 64 percent of the total in the hospice care ward of the Chaoyangmen Hospital in Beijing. In recent years, many older people had abandoned medical care for financial reasons.
The report was based on a survey of more than 20,000 valid questionnaires from 20 provinces, autonomous regions and municipalities.
"The country should mobilize all social sources available to create a better
environment of nursing care and medical treatments for old people," Guo said,
adding that policy support was also needed.
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Minimum allowance scheme 'meets target'
Source: China Daily | Updated: 01-30-2008
The national minimum living allowance scheme now covers almost every eligible city dweller and more than 34.5 million rural residents, a Ministry of Civil Affairs (MCA) official said yesterday.
The figures meet the goals set by a State Council circular issued in July that said the scheme should cover rural areas by the end of last year, Wang Zhikun, deputy chief of MCA's minimum living allowance department, said on an online interview on www.gov.cn.
The rural allowance scheme, however, "still needs further regulation and improvement which is the focus of our work this year," he said. Official figures show 21.48 million rural people's income was less than $85 a year at the end of 2006.
Last year, the central government raised its subsidy for the system by 51 million yuan ($7.08 million) for cities and 104 million yuan ($14.45 million) for rural areas. Subsidies for urban recipients, who are suffering the most because of the recent price hikes, has been raised three times since the later part of last year.
"Should consumer prices remain high or increase further, the central government will raise its financial support both for the urban and rural minimum allowances," Wang said. "Also, it would request local governments to adjust their standards accordingly."
"In January, the MCA and the Ministry of Finance have allocated 1.5 billion yuan ($208.46 million) to the rural minimum allowance and 9.12 billion yuan ($1.27 billion) to the urban scheme because of soaring prices and bad weather."
Subsidies under the system, introduced in cities in 1997 and in rural areas last year, vary according to the economic status of a region. But its basic aim is to enable people in the low-income group in cities and the countryside both to get adequate food and clothing.
The average allowance last year was 182.4 yuan ($25) per person per month in cities and 70 yuan in rural areas, says an MCA report, released last week.
Li said a comprehensive social relief system is already in place in the country.
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Alleged HK celebrity sex photos create a stir
Source: Shanghai Daily | Updated: 01-31-2008
HONG Kong police said they have retrieved the IP addresses of more than 30 Internet users who allegedly posted nude pictures of a local actor and actress in bed, shocking the city's entertainment industry, China News Service reported today.
The report cited Hong Kong media as saying that police in the special administrative region has already required several locally-registered Websites and BBS management firms to submit information about their clients. Police suspect the clients leaked the obscene.
The picture of a man, who looks like 28-year-old Hong Kong actor Edison Chan, and a woman, suspected to be actress Gillian Chung, 27, was posted on a Hong Kong Website early this week. It soon became a massive draw among Internet users across the country.
More than 100 police officers have been sent to investigate the case and police warned local Websites that they should delete the pictures at once as they have the responsibility to stop crimes, the report said.
The police department held a meeting this week with more than 200 people who are responsible for major Hong Kong Websites and BBS communities, the report added.
The picture, which is shot in dark light, showed both naked on a hotel bed.
The Emperor Group, the agency of both Chan and Chung, denied the couple in the picture were its artists and said the pictures were faked. The firm said it will seek a lawsuit against those behind the "fake" pictures.
Chan played a role in "Internal Affairs," the top box office draw ever in Hong Kong's film industry. The film was later adapted by Hollywood director Martin Scorsese as "The Departed."
Chung is a member of the most popular female singing group Twins along with Charlene Choi.
The report quoted an unnamed detective on the case who said that the pictures may have been taken with a cell phone camera.
Chung is said to have a fever and won't leave her home because of the picture scandal while Chan has flown to his birthplace in Canada to "visit his mother," according to a story by Sina.com today.
Chan and Chung were said to be dating in 2001.
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New airport to operate in Beijing around 2015
Source: China Daily | Updated: 01-31-2008
A second airport will be built in Beijing, a senior official said yesterday.
Scheduled to open in 2015, the new facility will provide additional capacity once Capital International reaches its maximum.
A new, third terminal at Capital will open for testing at the end of next month.
Yang Guoqing, deputy minister of the General Administration of Civil Aviation of China (CAAC), said at a press conference there will be no further large-scale developments at Capital.
He dismissed rumors the second international airport will be built in Beijing's Daxing district.
"The location of the second airport has not been decided, because choosing the right location is a very complicated matter," he said.
Yang said the economic development strategy of the Beijing-Tianjin-Hebei area and the pattern of passenger and cargo flow has to be considered.
The new airport should also not come into conflict with the existing facilities in Beijing and Tianjin in terms of air space, he said.
The CAAC is currently conducting a study of several world cities that have two or more airports, including New York and Shanghai, to help it decide on the best location, Yang said.
His remarks marked the first time a senior CAAC official has spoken about the plan to build a second international airport.
The idea for the facility emerged in 2002, after Beijing won the rights to host the 2008 Olympics.
While the Beijing municipal government and the CAAC suggested expanding Capital airport to handle the high passenger flow during the Games, authorities in Tianjin municipality and Hebei province proposed the development of a new airport within their regions as a solution.
The central government decided in 2003 on the expansion of Capital and ordered all works to be completed before 2008, Zhang Guobao, deputy minister of the National Development and Reform Commission, said yesterday.
The expanded airport has been designed to handle 76 million passengers and 1.8 million tons of cargo a year by 2015.
The new third terminal has been billed as the largest and most advanced in the country, with the 27 billion yuan ($3.75 billion) investment expected to be recovered in 12 years.
Two areas of the terminal - T3C and T3E - have been completed and passed system tests last year.
Zhang, who is also chief commander of the airport expansion project, said the first batch of six airlines, including two domestic carriers and four foreign ones, will move into T3 on Feb 29. A second batch of 26 airlines, including Air China and 11 Star Alliance members, will move in on March 26.
A third section of the terminal, T3D, is still undergoing interior work and will be completed in May, officials said.
The later date is due to work on T3D starting two years after T3C and T3E, Ding Jiangang, the project's chief designer, said.
On completion, T3D will receive foreign athletes and officials who arrive in charter flights during the Olympics. This group of visitors accounts for at least 65 percent of the total number of foreign guests, Zhang Zhizhong, president of the Capital Airports Holding Co, said.
Beijing Capital International Airport, built in 1959 and expanded in 1999, is designed to receive 35 million passengers a year. But according to official figures, last year it received more than 52 million.
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Price Controls Will not Control Inflation
Source: Economic Observer | Updated: 01-21-2008
On January 16th, Chinese government started up temporary price control measures in order to prevent rapid price increases and maintain a "normal and stable" price system. It is obvious that the government attaches great importance to price rise situations, and this reflect its resolve to restrain inflation.
Over the past few months, any business that increased its prices was invariably criticized. Government departments, on the pretext of maintaining price stability, forced such businesses to halt their price increases. On the surface, such a measure does help to maintain the market price so that the civilians won't pay much higher living cost. However, if deeply analyzed, those measures may have the opposite effect.
In the competitive market, as material costs continue to increase, they must either increase the sale price or else reduce output in order to cut down their losses. In response to the administrative measures, businesses will probably reduce their output, which is bound to lead to even more serious conflicts between supply and demand-- and further price rises. This is probably not what policy-makers want.
At present, high consumer prices have affected all social classes, but especially those in the low-income bracket, who are still anticipating even higher prices for the goods they rely on most. Under such circumstances, counter-inflation naturally becomes the government's primary goal. But this goal shouldn't be achieved by price controls, or by keeping companies from price-raising and transferring the costs to them.
It's worth noticing that in a competitive market, companies have the right to adjust their product prices independently according to market performance and cost variation, as long as this adjustment is legal and in line with anti-trust laws. Even though soaring prices have affected the lives of the low-income group, it's the government who should be responsible for relief and subsidies--not these firms.
In fact, higher costs doesn't mean higher prices are necessarily the right solution. Different companies have different abilities to handle rising cost and risks, and to take the lead and raise prices could result in a slide in market share if their competitors don't follow suit. Though up-stream product prices were rising before the second half of 2007, finished consumables didn't grow too much, proving that no one dared to make any hasty move to raise prices in such a competitive market.
What should be more focused on are monopolies and oligopolies, which are well-placed to manipulate the market and benefit directly from price increases. In China, they control public utilities closest linked to the lives of common Chinese--including electricity, oil, water and gas. Therefore, the government should effectively intervene with these enterprises' prices. However, for other enterprises in the competitive market, the government should restrain itself from brashly interfering.
The National Development and Reform Commission claims that the temporary price intervention doesn't mean price freezing. It says it will not change the nature of businesses' pricing autonomy. We believe that here, the state has indicated its boundaries, and we can see it as a standard based on principle. Excessive price interventions need only contradict these terms.
The objective of anti-inflation is to stabilize the prices. It is not as easy as controlling the prices. In face of sustained inflation pressure, many people will recall the control instruments under china's planned economy. Some even suggest issue the purchase certificates again to make the instruments of planned economy and market economy mutually complementary. However, they neglect that china has become an emerging market economy state after 30 years' reform and opening. It is ridiculous to control the inflation following the planned economy ways.
Inflation is always a monetary phenomenon. The decision-makers should research and judge it from the macroscopic angle, and focus on the instruments as interest rate and exchange rate. Besides monetary policies, financial policies should be concerned as the supplement, such as to grant subsidies to low-income families. This is believed to be more effective policy blending of anti-inflation.
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Tight monetary policy must not be eased
Source: China Daily | Updated: 01-31-2008
Since the start of the year, news stories causing concern have appeared around the world.
The United States is seeing an increasing negative influence from the subprime crisis on its financial market. Stock markets around the world have seen dramatic ups and downs in the last week while the Chinese stock market has also fallen. Heavy snowstorms have hit many parts of China causing huge damage to the economy.
Many say the Chinese authorities should reconsider the tight monetary policy currently in effect.
Their concern is not baseless for the economic situation in and out of China does not allow for too much optimism. Capital markets around the world are stumbling. China and the US are also seeing a narrowed difference in their interest rates.
However, these facts are far from adequate for the Chinese authorities to change the tight monetary policy.
Many world market analysts believe the US economy is entering a recession because of the subprime crisis. But it is still too early to make this judgment.
Admittedly, the subprime crisis has hit the US economy badly, but its negative influence is unlikely to pull the US into recession.
The real serious problem in the US economy is the rapid devaluation of the dollar. The depreciation has lowered the purchasing power of individual consumers who buy commodities priced in US dollars. It has also driven up the prices of major commodities on the international market.
As a country whose imports exceed its exports every year, the US finds its imports much more expensive now and this could severely affect domestic consumption.
But the fundamentals of the US economy have not been changed, so it might be able to shrug off the subprime crisis as long as the US dollar stops its slide.
At the same time, the Chinese economy is still in high speed growth and it has been so for the past three decades. This growth momentum could carry on for next three decades because the Chinese economy still has great potential for further development.
China has a huge economic disparity among different regions and among different sectors. This disparity, long viewed as a disadvantage, could be turned into a force driving the economy forward under proper guidelines by the authorities.
The heavy snowstorms hitting China have caused huge financial losses. It has also affected the daily life and travel plans of a big portion of the country's population.
However, the damage is only temporary. The economy will quickly resume its normal track and pace once the weather changes.
In China, there has been overcapacity in many industrial sectors. Combined with the efforts from the governments at all levels, this overcapacity will help erase the negative influences posed by the natural disaster.
China's economic development has relied on urbanization and the boom in the property market after 2000. The two engines are not going to be changed by stock market fluctuations or snowstorms.
Figures from the National Bureau of Statistics (NBS) suggest that the business cycle index was 121.3 in December last year, while the ideal level should be 100. This hotter-than-normal status of the macro economy was maintained for several months last year.
The NBS estimates that China's GDP in 2007 will be 24.7 trillion yuan, 11.4 percent higher than 2006. This figure is much beyond the target of 8 percent. And it is the fifth year in a row that the Chinese economy has achieved double-digit growth.
Since July last year, China's exports have grown robustly, the foreign exchange reserve has kept on rising, new bank loans reached their annual ceiling months before year-end, and investment in fixed assets has stopped declining.
All these signs back one conclusion: the Chinese economy is overheating.
Although the official rise of the consumer price index (CPI) for 2007 was only 4.8 percent, the system for calculating the CPI is defective, the rise was not mirroring the true rise in prices for essential goods. If the authorities decide to loosen the monetary policy according to the 4.8 percent growth, it would be a misunderstanding of economic performance.
Despite the authorities' efforts to control price rises through administrative means, the prices might rise again this year, both on the international market and on the domestic market due a shortage of certain commodities caused by the snowstorms.
Therefore, if the Chinese central bank followed the US Federal Reserve and loosened its monetary policy, it would not only hinder efforts to prevent the economy from overheating, but also add more bubbles to the stock and property markets. It might even push the consumer price index even higher, or cause other unforeseeable damage.
The authorities should firmly stick to its tight monetary policy as it is essential to maintain the economic soundness of China under the prevailing conditions.
The author is a researcher with the Institute of Finance and Banking under Chinese Academy of Social Science.