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2012年3月 7日 (水)


--The Asahi Shimbun, March 6
EDITORIAL: China’s lower economic growth target a wise move

China’s economy has been growing rapidly over the years, but it has created a raft of unwanted by-products as well, such as economic disparity, corruption and environmental destruction.

Now, China has finally decided to shift its policy priorities toward economic growth more focused on social stability. We welcome the move.

The annual meeting of China’s National People’s Congress began in Beijing on March 5. In his work report to parliament, Premier Wen Jiabao announced that the government has set a policy target of 7.5-percent economic growth for 2012, down from the 8-percent goal the country pursued for seven consecutive years since 2005.

Wen said the government has lowered the growth target to “achieve higher-level, higher-quality development over a longer period of time.”

China’s Hu-Wen administration, led by President Hu Jintao and Wen, is slated to pass the baton to a new leadership through a power transition to be approved at the National Congress of the Communist Party of China scheduled for autumn this year and at next year’s gathering of the National People’s Congress.

This year’s meeting of the legislature serves as the platform for the current leadership to start the final phase of its efforts to achieve policy goals.

The size of the Chinese economy has quadrupled over the 10-year period in which the country has been under the current leadership.

But the rapid economic expansion has created various problems, including a widening gap between rich and poor, real estate market bubbles and the deterioration of the environment.

The fiscal stimulus measures the government introduced to protect the economy from the effects of the global financial crisis that started in the United States in 2008 led to a wave of public works projects of dubious worth. The public spending spree has left local governments with massive bad assets.

Wen stated that Beijing will lower its target for growth in the value of total exports and imports to “around 10 percent” from more than 20 percent last year as a step to correct such distortions in the economy.

The premier also said the government will aim at economic growth driven mainly by domestic demand through policy efforts to increase people’s income and thereby stoke consumer spending. To do so, he said, the government will try to increase the nation’s per-capita income at the same pace as its economic growth rate.

All these decisions represent welcome steps to guide the economy away from the high-speed but unbalanced growth in recent years.

But the growth-oriented economic policy is not the only cause of the problems plaguing the nation.

Another contributing factor is the government’s tight control on the yuan’s exchange rates.

Although major Western countries have been urging Beijing to allow the Chinese currency to appreciate, Wen only said the government will increase “flexibility of the managed floating exchange rate system.”

A cheap yuan could make the Chinese economy even more dependent on exports for growth and increase the risk of asset bubbles by creating excessive liquidity.

Chinese leaders should not forget that their country would suffer most from the bursting of such bubbles.

Meanwhile, there is no end to stories about party seniors’ intervention in economic affairs, such as bidding for construction projects.

Wen pledged to step up efforts to crack down on such acts. But that will not be enough.

Behind this problem is the policy system that gives the Communist Party the power to make all policy decisions. It is imperative for China to reform the system.

There may be concerns that Beijing’s move to lower its growth target could have a negative impact on the economies of countries with close ties with China, including Japan.

In the long run, however, the world economy would be better served by more stable and balanced development of Chinese society.


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