Sub-anchor: Difficult Year for China's Economy

   Date:2011-12-14     Source:puchangpingwangxin

Now to discuss this meeting in further details, we are joined in the studio by CCTV reporter Zhang Nini.

Q1: This year’s Central Economic Work Conference opened a lot later than previous sessions, what does this tell us?

A1: I think it goes to show the complexity of the situation China is in. If we look back, 2011 has been a very tough year for most countries in the world. It started off with Japan suffering a massive earthquake and tsunami. Aside from the human disaster, it sent shockwaves across the Chinese economy. The political turmoil in west Asia and North Africa have sent oil prices soaring and that adds uncertainty to the world economy. This scenario was further exacerbated with the US and eurozone debt crisis. The slowdown in market demand from these regions has hurt Chinese exports since August. In fact, the export growth rate in November dropped to less than 14%, the lowest in nine months. Poor demand, rising costs for labor, land and raw materials, as well of course as rising protectionism. All these are expected to lower export projections in the coming year.

Domestically, China’s stimulus plan in 2008 and 2009 largely insulated China from the world economic crisis. Instead of recession, the Chinese economy recorded double-digit growth, a stark contrast with the stagnation in most western countries. But the miraculous rebound has also a downside: huge government debt and plenty of bad loans. This makes financial stability a top concern at this year’s conference. The country is also trying to keep inflation in check, boost consumption and transform its development pattern. So it wasn’t an easy year, and it’s not over yet.

Q2: The conference has been held every year since 1994, what are the major policy highlights?

A: The Central Economic Work Conference is reviewing China’s stimulus measures over last year and will set the tone for the coming year’s macro-economic policies. There have been some underlining themes throughout the years. For example, transforming the development pattern has been heard a lot. The shift to domestic consumption is made more urgent as China gets more involved with the world since its entry to the WTO. But being part of the global family also means more competition. So encouraging innovation and developing domestic brands has also been important. In 2005, environmental awareness and energy-efficiency appeared for the first time. This reflected China’s efforts to cut carbon emissions. But overall, throughout the years, the government has sticked to what it calls a "proactive fiscal policy and prudent monetary policy." Other highlights also include improving people’s livelihood, improving social security; increasing farmers’ income and deepening rural reform.

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