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BIZCHINA> Review & Analysis
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Incomes rise when the whole economy grows
(China Daily)
Updated: 2008-07-28 11:44 Raised together with the plan of doubling income, the Japanese government also had a specific blueprint to stimulate economic growth. Under the overall aim of achieving high-speed economic growth, improving living standards and accomplishing abundant employment, its target for annul GDP growth was 7.2 percent and that the GDP in 1970 should be more than two times that in 1960. Measures were taken one after another to ensure these goals could be realized. Foreign investment was checked, domestic deposits encouraged to be invested, industrial structure upgraded, trade and international cooperation in economic terms supported, human resources nurtured, researches in science and technology sponsored, income gaps narrowed and social stability guarded. As a gigantic plan for economic development, the income-doubling plan involves reallocation of administrative and economic resources, changes in the fiscal, taxation and subsidy policies and restructuring of industries. In other words, the success of this plan relies on a transition of the whole economy. The plan is unlikely to bear considerable fruits if it is only launched in a file issued by the labor authorities. The Japanese economy grew on investment increase and efficient use of resources. From 1952 to 1970, the private investment in Japan increased by more than 10 times and the producer efficiency also enhanced dramatically. In China, the private investment is seeing remarkable growth, but these investors are in trouble for the tightened money supply to rein in worsening inflation pressure. It is a challenging issue for current Chinese policymakers to tackle - how to stimulate growth while maintaining economic soundness. A more important task is to improve farmers' income because the country's overall consumption is impossible to stimulate without substantial growth in rural consumption. Between 1961 and 1970, the income of Japanese factory workers grew by 1.7 times. The government granted huge subsidies to farmers growing grain crops, which soon led to a price hike of agricultural produces. From 1960 to 1969, the price index of agricultural produces went up by 95 percent in Japan while the price index of industrial products bought by rural residents climbed up by 30 percent. Farmers also benefited a lot from the land price rise. As a result, farmers could afford to purchase and use machines in agricultural production as well as durable commodities at home. Thus, industrial manufacturers had a much bigger market for their products. It is clear that the income-doubling plan is a fruit of the economic boom, upgraded economic structure and improved income levels. We should make long-term arrangements for bringing it into reality. (For more biz stories, please visit Industries)
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