National economy is not overheated in general
(Chinanews.cn)
Updated: 2006-06-28 10:39
"Despite some partial frictions and problems that recently occurred and the
emergence of what seemed like bubbles in some markets, China's national economy
does not appear to be generally overheated."
 Chen Dongqi, deputy-director of the Academy of Macroeconomic Research
under China's National Development and Reform Commission, made the above remarks
at the "2006 China management science forum and the 8th China managerial
innovation conference" held in Beijing on the 26th.
Chen said that in the first quarter this year, China's GDP rose 10.3%, which
was indeed higher than the secular trend average since the implementation of
reforms and opening-up policies. However, the recent rapid growth of the economy
is fairly persistent, maintaining a trend of "growing steadily" without getting
off the track of "stable and comparatively rapid growth". Some markets have very
noticeable bubbles and a second round of "partially overheated symptom" has
appeared in this economic cycle. Nonetheless, the structure of overall
supply-demand balance remains undisturbed and there is no obvious imbalance in
the overall supply and demand.
This economist warned that some partial frictions and problems have recently
occurred in China's national economic operations and some productive sectors are
developing too rapidly, while the national economy has seen no overheating as a
whole. Considering either the requirement of short-term balance in economic
aggregate or the need for short-term sustainable growth, it is inadvisable to
push the economy into a "hard landing" by implementing comprehensive tight
macro-control policies.
Like the "first-time control" conducted in 2004, the "second-time control"
set a short-term goal of controlling the accelerated pace of economic growth,
squeeze out the bubbles and prevent the imbalance of economic aggregates. The
long-term target is to avoid an economic recession after years of
super-prosperity.
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