During the annual session of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), China’s top advisory body, which started in early March, the 11th Five-Year Plan for National Economic and Social Development (2006-10) is in the spotlight for
　　
　　discussion. Economists who are also CPPCC members explain what will be the top issues for China in the next five years. Excerpts follow:
　　
　　New socialist countryside
　　
　　Lin Yifu, Director of the China Center for Economic Research at Peking University
　　The target of building a new socialist countryside raised in the 11th Five-Year Plan not only includes the emphasis of the former “agriculture, farmers and countryside” policy on developing production and increasing the income of farmers, but also contains the contents of social morals and appearance of the countryside as well as democratic administration.
　　The government made it clear in its Government Work Report that it will increase input to support its “agriculture, farmers and countryside” policy. Last year, the Central Government invested 297.5 billion yuan in the countryside, farmers and agriculture, while that amount will be increased by 42.2 billion yuan to 339.7 billion yuan.
　　In the Government Work Report, the premier mentioned the decision to raise input in the public infrastructure of the countryside. This will help to build a clean and tidy country. As for increasing the income of farmers, it is most important to transfer the surplus rural labor. Now we have the problem of overproduction. If we increase input in rural infrastructure, the rural market will be explored, which will not only help to solve the current problem of overproduction, but will also create a favorable environment for the transfer of surplus rural labor.
　　After the agricultural tax was exempted, the government said it would increase its input in the countryside by 130 billion yuan every year for rural education and the functioning of government. With the government’s financial support, I believe that target of building a new socialist countryside will be achieved.
　　
　　Shift of economic growth mode
　　
　　Wu Jinglian, a researcher with the State Council Development Research Center
　　The Ninth Five-Year Plan (1996-2000) clearly stipulated that China should realize two fundamental shifts: One is to shift the economic growth mode from an extensive way to an intensive way; the other is to shift the economic system from a planned economy to a market economy. But these areas have yet to be fully shifted despite much discussion.
　　In a symposium of the standing committee of the CPPCC held in July 2004, CPPCC members discussed why it was difficult to change the economic growth mode and where the obstacles lie. Some raised an important point--that is, the role of the market mechanism in distributing resources was not being given full play, with government officials controlling the vital rights of resource distribution.
　　Some CPPCC members used to work in the government. They talked about their own experiences of being under two main sources of pressure: political achievement and fiscal revenue. So they were still following the path of sacrificing resources in their control for high-speed economic growth.
　　After investigation and research, it’s clear that there are four obstacles hindering the smooth shift of China’s economic growth mode: the excessive power of government at all levels in distributing resources, the pursuit of political achievements by some officials, the pressure of taxation and financial revenues on industrial output, and the distorted pricing system for key means of production and resources.
　　
　　Foreign trade
　　
　　Xiao Zhuoji, Professor at the Economics College of Peking University
　　China’s international trade is gradually growing from weak to strong, but is still not strong enough. The country’s import and export trade was only $20.6 billion in 1978, but grew to $1.422 trillion last year.
　　The proportion of foreign trade in GDP was called foreign trade dependency. China’s foreign trade dependency grew from about 8 percent to 64 percent by 2004, the highest in the world. But the high foreign trade dependency of China was different from that of other countries, since half of the trade involved processing materials supplied by foreign customers for re-export. So the actual foreign trade dependency of our country is about 30 percent.
　　We should say that foreign trade has contributed a lot to China’s development. It enables us to make use of foreign resources and markets, increase our revenues and sustain a large number of employees. But now it’s time for us to reflect upon the problems in the import and export trade. There are at least three problems.
　　First, we had intended to open our market in exchange for foreign advanced technology, but in fact, we have yielded our market without getting back any core technology. The monopoly of technology is still a big problem, so we need to rely on ourselves for innovation. Second, we lowered costs, especially salaries, but have not attained improved efficiency or profits. Third, we have expanded the scale of foreign trade, but have not enhanced our international competitiveness as we lack the ability to innovate and many of our products don’t have their own brands.
　　The products we export don’t include many hitech ones with high added value, resulting in relatively low benefits. In the future, our focus of foreign trade should be placed on bettering the quality of products and improving the competitiveness.

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