Sun, March 22, 2009
Business > Economy

China has conditions to achieve 8% growth target in 2009, official

2009-03-22 03:06:29 GMT2009-03-22 11:06:29 (Beijing Time)  Xinhua English

China Development Forum 2009 opens in Beijing, capital of China, March 22, 2009. China has conditions to achieve the 8 percent economic growth target this year, Zhang Yutai, president of the Development Research Center of the State Council said Sunday at the Forum.(Xinhua Photo)

BEIJING, March 22 (Xinhua) -- Conditions are favorable for China to achieve the 8 percent economic growth target it set this year, Zhang Yutai, president of the Development Research Center of the State Council said here Sunday at the China Development Forum 2009.

Zhang's conclusion was based on the 4-trillion-yuan (585 billion U.S. dollars) economic stimulus package, 500-billion-yuan tax cut and industry support plans. These would help boost the economy, he said.

According to preliminary statistics, the 4-trillion-yuan stimulus package was expected to contribute 1.5 percent to 1.9 percent to the economic growth this year, Zhang said.

The country's gross domestic product (GDP) rose 9 percent last year. The Chinese government has set an 8 percent GDP growth target for 2009.

However, the World Bank forecast China's GDP would grow 7.5 percent in 2009. The bank Wednesday cut its forecast for China's 2009 economic growth yet again to 6.5 percent from 7.5 percent. Its prediction stood at 9.2 percent Last November.

China's economic development was facing three major challenges -- the global financial crisis, periodical economic adjustment and extensive economic growth model, he said.

Beginning late last year, the government announced aggressive measures to ease the domestic impact of the global downturn. These included a 4-trillion-yuan stimulus package, a plan to expand rural home appliance purchases and support plans for key industries.

These measures were timely and decisive, and had helped boost market confidence, said HSBC Group chairman Stephen Green.

China was in the stage of urbanization, industrialization and consumption upgrading and the fundamental of the country's economic development remains unchanged, Zhang said.

"There are great potentials in domestic demand, which are powerful engine to boost China's economic development," he said.

Vice Finance Minister Wang Jun listed five key aspects where an active fiscal policy could be carried out to enlarge domestic demand, such as governmental spending, income rise, improvement on living standard, and technology innovation and energy saving.

To expand governmental investment in national key construction projects was a most active, most direct and most efficient measure to stimulate demand, said Wang.

Another measure was to reduce financial burden on companies and residents through tax cuts, rebates and exemptions.

"The 950 billion yuan fiscal deficit in this year's national budget accounts for less than 3 percent of GDP. It is under our total control compared with China's economic foundation and a strengthened finance," said Wang.

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