Focus on growth quality rather than on pure GDP

(Xinhua)
Updated: 2008-12-13 00:27

BEIJING -- China should focus more on the economic growth quality rather than on the growth pace as the rate could be well above 8 percent in 2009, a former deputy finance minister said Friday.

Jin Liqun, now chairman of the supervisory board of China Investment Corp., the country's US$200 billion sovereign wealth fund, made the remarks at the Caijing Annual Conference 2009: Forecasts and Strategies in Beijing.

Jin, also former vice president of Asian Development Bank, said the Chinese government has taken timely and effective stimulus measures to spur growth.

"I'm confident the economy will expand 8 percent next year. Maybe at last the pace could be 9 percent," he told the financial forum.

China's economy grew 9 percent annually in the third quarter, down sharply from 10.4 percent in the first half, as growth in exports and property investment slowed.

Economic data released the week showed further downside risk to the economy. Exports in November slid 2.2 percent year-on-year, the first monthly decline since June 2001 and down from 19.2 percent growth in October.

Liu He, deputy director of the Office of the Central Leading Group on Financial and Economic Affairs, said the export situation won't be too pessimistic as long as there is credit support.

The economic growth will pick up after relatively slower growth in the first quarter of 2009 as the stimulus is starting to take effect, Liu stated.

The World Bank late last month cut its 2009 forecast for China's economic growth to 7.5 percent from 9.2 percent in June.

China has cut its lending rate four times since mid-September and unveiled a 4 trillion yuan (583 billion yuan) stimulus package to avert an economic slump.

"But all of us care if the stimulus fund could be well used and the banks could avert bad loans in the new round of credits," Jin said, adding the quality of economic growth is more important.

He noted that the stimulus should help increase farmers' income while being spent on infrastructure building.

"If no consideration was given to increasing the income of 750 million farmers and 200 million rural migrant workers, there's no point in talking about boosting consumption."

China is striving to rely more on domestic demand to offset the impact of the global economic recession as external demand for its goods fell sharply.

Huang Qifan, executive vice mayor of southwest China's Chongqing Municipality, echoed Jin's viewpoint.

The stimulus fund could not be simply and excessively used on fixed-asset investment, Huang said. The money shouldn't be spent on high polluting and energy consuming sectors to pursue blindly pure gross domestic product (GDP) growth.

He added that government should cut taxes and increase public spending and subsidies for the average citizens to boost domestic consumption.

The two-day Caijing annual conference, the sixth of its kind, attracted hundreds of senior government officials, economists as well as officials from international financial institutions including the World Bank.