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Leaders meeting focuses on yuan, growth
(Reuters/chinadaily.com.cn)
Updated: 2005-11-30 08:55

That same policy thrust is also at the heart of the Communist Party's 11th Five-Year plan (2006-2010), which aims to tilt growth away from exports and investment and calls for greater spending on public services to help the poor. The program is due to be endorsed by this week's conference.


President Hu Jintao shows the way to Mongolian President Nambariin Enkhbayar (L) during a welcome ceremony at the Great Hall of the People in Beijing November 28, 2005. [Reuters]

Starting January 1, a new personal income tax code will come into force, as the previous threshold for taxation would be increased to 1,600 yuan (US$197) from 800 yuan (US$98.5), a move taken by the top leadership to lessen the burden of the low wage-earners.

Economists said the meeting was likely to keep monetary and fiscal policy basically stable in 2006 with the aim of achieving economic growth of 8 percent -- the same goal as this year.

"I think economic growth will be kept at a steady, relatively fast pace next year with the priority given to changing the growth model through structural adjustments," said an influential economist at the National Development and Reform Commission.

The economy has grown by over 9 percent for more than two years, despite government measures since mid-2003 to rein in overheated sectors such as real estate and steel.

Chinese officials and economists believe that keeping a high growth rate of GDP is the most effective economic measure to create and provide enough jobs for the country’s huge work force and prevent social disturbance. The Ministry of Labour and Social Security estimate an annual 9-10 million enter the job-seeking forces.

Contradicting the rapid economic growth mode, how to curb non-stop fatal industrial accidents and prevent the polluted air, water and land from deteriorating is also high on the agenda of the top leaders meeting, sources said.

The target for inflation in 2006 could be about 2 percent, well below this year's initial 4 percent goal, reflecting falling grain prices and overcapacity, the sources said.

The government issues annual economic targets as a legacy of central planning. The goals, which are no longer mandatory, will be formally announced in March when the annual National People’s Congress convenes in Beijing.


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