Three-dimensional policy drives steady growth

A three-dimensional policy focusing on the macro economy, micro economy and social security has led to steady growth of the Chinese economy in 2013 amid uncertain post-crisis recovery worldwide.

China's macroeconomic data released this week show the country is on track to meet the government's economic growth target for this year.

The Asian Development Bank on Wednesday elevated its forecast of China's economic growth this year to 7.7 percent from 7.6 percent.

Looking back, the Chinese economy endured a protracted slowdown in the first half of 2013, with negative growth in fiscal revenues, a shortage of money in the financial system and a decline in exports.

Facing challenges, the new Chinese leadership made a sober assessment of the situation and adopted a strategy that benefits not only today but also the future.

"Macro policy should be stable, micro policy should be flexible and social policy should support the bottom line. All of them should be coordinated," according to a statement released after a meeting of the Political Bureau of the Communist Party of China Central Committee on July 30.

The direction, intensity and pace of macro regulation should be managed well. The proactive fiscal policy and prudent monetary policy would remain, it said.

Facing a prolonged economic weakening, the central authorities adopted a different approach by not launching a one-off fiscal and monetary stimulus package, but rather introducing a set of market-oriented reforms to boost the intrinsic vigor of the economy.

Figures show that, as a result, the Chinese economy picked up in the second half of the year.

The National Bureau of Statistics (NBS) said Tuesday China's economic growth accelerated to 7.8 percent in the third quarter, above the government's full-year target of 7.5 percent an up from 7.5 percent in the second quarter and 7.7 percent in the first.

In the first 11 months, the consumer price index (CPI), a main gauge of inflation, rose 2.6 percent year on year, comfortably below the government target for the year of 3.5 percent, it added.

China's factory growth held firm at an 18-month high, with the Purchasing Managers' Index (PMI) standing at 51.4 in November, unchanged from October and ahead of market expectations for a reading of 51.1, the NBS said.

Meanwhile, micro economic policies aimed at promoting reform and innovation, stimulating market vitality and boosting domestic demand, have helped form an intrinsic force to drive the Chinese economy.

This year, China cut more than 300 administrative examination and approval items, simplified procedures for foreign direct investment, exempted tax for small businesses, replaced the business tax with s value-added tax, eased control over interest rates and established the pilot Shanghai free trade zone.

China was very much on the path of furthering market-led economic reform to realize its own equitable and equal society, said Shada Islam, policy director at the Brussels-based think tank Friends of Europe.

Nicholas Borst, research associate and China program manager with U.S. think tank the Peterson Institute for International Economics, said there was some progress in previous quarters on rebalancing the Chinese economy as the services sector grew faster than manufacturing.

In the first three quarters of 2013, the tertiary sector grew at a rate 0.6 percentage points higher than that of the secondary sector, with rocketing e-commerce sales, fast development of logistics and steady growth in private investment and domestic consumer market.

Last but not least, the Chinese government has endeavored to improve people's lives with better social security measures.

Resident income in both urban and rural areas has been increasing, government expenditure on education at national and provincial levels gives preference to poverty-stricken areas and more than 3 million households will be able to move out of shantytowns into new apartments this year.

"Economic growth should have a bottom line," Zhuang Jian, an economist at the Asian Development Bank, told Xinhua, adding improving people's lives through social security, and fiscal and tax systems was "the ultimate goal of economic development and the basis for social stability."