My comment: China practices full transparency in economic forecasts and policies. In a way that permits all Chinese to make informed decissions for their daily life knowing what sort of economic environment we will have. In that sense, after the central economic council of state conference elaborated its final report and government approved it, next weeks before Lunar New Year or Spring Festival are crucial to let everybody know in detail what we can expect from 2010 in China. Premier Wen started this phase with an interview in depth to Xinhua.
I organized it in four main messages: 1) Improving people's livelihood always a priority 2) Equal development right 3) Macroeconomic policies to continue in 2010 4) prevention of possible inflation in 2010. 1) Improving people's livelihood always a priority. China should be proud of itself in 2009. Chinese Premier stresses confidence, responsibility, cooperation in tackling downturn in 2010 and ahead. Despite the hostile economic environment, once again we all government, public sector, private sector, regular citizens behaved with responsibility, hard work, determination and cooperation in 2009. Once again those values provided their fruits. "Despite the tight fiscal condition, China beefed up the income and welfare enjoyed by the retirees and low-income residents" (1) and continued to build the healthcare system in urban areas and specially in rural areas where "the rural medical cooperative system has covered more than 800 million people" (1). However, we still face great challenges in 2010 and ahead to reach 2020 goals. To achieve economic success science, technology are key to China's economic development. This is a civlization crisis, therefore only advances in emerging technologies allow to conquer this long term crisis. Wen said financial crisis in history always brought about technological revolution. "The key to conquer the global economic crisis lies in people's wisdom and the power of science and technology," (3) Wen did not elaborate on "emerging strategic industries" but said that the country should continue to give full play to its advantage in the manufacturing sector, while strive to develop important areas related to environment and people's living. (3) I have to add that rise of education budget as decided by the central comission is crucial to achieve 2020 goals and beyond. 2) Development rights "Around the world 1.6 billion people still had no access to electricity while 2.3 billion people had to burn coal or wood to keep warm or to cook." (4) All human beings around the world have equal rights to achieve the basic human rights: a roof, food, to be protected against outside weather conditions, etc. To perpetuate the gap between rich and poor areas is not an option for any government both developed and developing ones. However, China reduced energy intensity and CO2 intensity (per unit of GDP growth) 46% from 1990 till 2005, and will further cut them 45% from 2005 to 2020 (4) disregarding what other countries might do or might do not. This is selfishness and selflessness at the same time. 3) Macroeconomic policies to continue in 2010. Although growth target is not formally settled, the aim is to use anything above a prudent 8%-8.5% for "more investment to social welfare, technical innovation and energy conservation and emission cuts next year" (5) In that sense, he said that "A stable Chinese currency is good for the international community,". (6) I must add that any responsible government should mind on stability of their currencies if livelihood of their people is a priority for them. Foreign trade issues must be addressed using trade agreements and domestic structural reforms, not using trade protectionism, provoking currency crisis, etc. that make profit and loss accounts of corporations up while they hurt their regular residents and global economy by seeding inflation rises. 3) Chinese Premier stresses prevention of possible inflation in 2010. Last data from November raises concern (7) as CPI rose 0.6% while PPI declined just 2.1% (from 5.8% in October) all sized year on year. Gap PPI-CPI shortens to 2.7 percentage points not because CPI moderated its pace but because PPI grew faster as a consequence of rise of commodities. Data in December and January are to be crucial to check whether or not retailers transmit PPI-CPI gap to final consumers. As he told "China is not facing an inflation issue at the moment..., but we should foresee such a possibility and maintain consumer prices at a reasonable range" (8) Peace and best wishes. Xi (1) Improving people's livelihood always a priority: Premier http://news.xinhuanet.com/english/2009-12/27/content_12711340.htm (2) Chinese Premier stresses confidence, responsibility, cooperation in tackling downturn. http://news.xinhuanet.com/english/2009-12/27/content_12711203.htm (3) Premier Wen says science, technology key to China's economic development http://news.xinhuanet.com/english/2009-12/27/content_12711291.htm (4) Premier Wen defends China's development rights http://news.xinhuanet.com/english/2009-12/27/content_12711466.htm (5) Macro-economic policies to continue: Premier http://news.xinhuanet.com/english/2009-12/27/content_12711436.htm (6) China won't yield to yuan appreciation pressure: Premier http://news.xinhuanet.com/english/2009-12/27/content_12711333.htm (7) China's November CPI rises 0.6%, ending nine months of fall http://news.xinhuanet.com/english/2009-12/11/content_12629241.htm (8) Chinese Premier stresses prevention of possible inflation http://news.xinhuanet.com/english/2009-12/27/content_12711396.htm -- You received this message because you are subscribed to the Google Groups "World-thread" group. 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