Tuesday, 14 October 2008


Sunday, October 12, 2008

BEIJING: China's ruling Communist Party expressed confidence Sunday in the country's economy and said it would strengthen efforts to expand domestic demand to counter the effects of the global financial turmoil.

The party, led by President Hu Jintao, released a statement at the end of a four-day meeting of its Central Committee at which it also approved an agricultural reform and development plan aimed at doubling rural incomes by 2020.

"The country's overall economic situation is good. The economy is growing quickly and the financial sector is operating steadily. The basic momentum of the country's economy remains unchanged," said the statement, released through the official Xinhua News Agency.

It said China should adopt flexible and prudent economic policies and ramp up domestic demand, while maintaining the stability of the economy, the financial sector and capital markets.

"We should continue keeping social stability and pushing the country's economy toward sound and fast development," the statement said.

But it also acknowledged there were inherent "contradictions and problems" with China's economy and that all party members should prepare to face greater challenges as more instability emerges in the international economy.

Economists have cut growth forecasts for China this year to as low as 9 percent, down from last year's 11.9 percent. That would still be the highest rate for any major country, but Communist leaders want to keep growth robust to reduce poverty and avoid job losses, which could fuel political tensions.

China lowered interest rates on Wednesday in the latest official effort to revive slowing economic growth and help struggling exporters.

China faces difficulties from high energy costs and inflation pressures, but officials say the country has growth potential despite global uncertainties because of its large labor pool, vast domestic market and the improved competitiveness of its companies.

The party's statement said it aims to double the income of the country's farmers in 12 years in a move aimed at easing the growing and politically explosive gulf between the urban elite who have benefited most from China's two-decade-old economic boom and its vast poor majority.

The meeting also set goals of boosting rural consumption levels by a "big margin" and eliminating poverty in rural areas by 2020, Xinhua said.

In 2007, the average income of rural residents was 4,140 yuan (US$590) and there were 15 million people living in absolute poverty in the countryside, the report said.

The party also pledged to develop and modernize the country's agricultural system for better efficiency and increased productivity through innovation.

State media reports ahead of the meeting said the committee would review an amendment to the land management law to give its 750 million rural dwellers more freedom to lease or transfer their land, but the statement did not mention it. Such practices are increasingly common as rural workers move to the city.

Chinese economists hope the agricultural reforms will lead to larger, more efficient farms that are better able to meet the demands of the evolving economy while maintaining the country's self-sufficiency.

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