Thursday, July 27, 2006
Roach quoting Wen Jiabao......
Global: China's Control Problem
Stephen S. Roach (New York)
Morgan Stanley
July 21, 2006
It’s one thing for small, early-stage developing countries to experience periodic spurts of hyper-growth. It’s another matter altogether when that happens for large, mid-stage developing economies. That’s precisely the case in China today where extremely rapid economic growth seems in danger of veering out of control. Unfortunately, without an effective policy arsenal and more of a market-based system, it is very difficult for incrementally-inclined Chinese authorities to temper
the excesses of the boom. Nor is the just-announced second tweak in bank reserve ratios likely to make much of a difference. The risk is the longer the boom runs, the tougher it will be to avoid a more treacherous endgame.
The latest Chinese growth numbers were off the charts. Never mind the decade-high 11.3% y-o-y comparison just released for real GDP in 2Q06. What caught my eye was the 19.5% surge of industrial output in June. With a relatively small services sector and a highly inefficient agricultural sector, the Chinese growth story has long been dominated by the more reliably measured ups and downs of manufacturing activity. Other than a few monthly comparisons that were distorted by calendar-year effects during lunar New Year celebrations, our China team believes this is the
strongest industrial output comparison that China has ever reported. Nor is there any secret as to the forces that are behind this boom. It continues to be concentrated in two sectors -- fixed investment and exports -- that now account for more than 80% of total Chinese GDP. Collectively, these sectors surged ahead by nearly a 30% y-o-y rate in 2Q06.
This is not a sustainable outcome for any economy. Sure, China is special, with its economic development dominated by urbanization, infrastructure, and industrialization. These are all capital-intensive activities that would naturally bias the investment share of Chinese GDP to the upside. At the same time, lacking in support from internal private consumption and bolstered by massive fixed investments by foreign multinational corporations, China’s low-cost export-led impetus also makes good sense. But this unbalanced growth model has now gone to excess. Even in their heydays, investment shares in Japan and Korea never went above 40% of GDP; China’s investment ratio is likely to hit 50% this year -- underscoring the growing risk of a major overhang of excess supply. Similarly, Chinese export momentum has encountered increasingly tough political resistance that has been manifested in the form of mounting trade frictions and protectionist risks. Moreover, China is struggling mightily with the consequences of its industrial boom -- namely, soaring prices of energy and other industrial materials, severe environmental degradation, and mounting risks of bottlenecks that have the potential to crimp economic activity.
Senior Chinese authorities have expressed considerable concern over this overheated state of affairs. On a recent visit to the Henan province, Premier Wen Jiabao stressed, “We need to prevent unhealthy and unstable situations and the imbalances that can occur during fast economic development to prevent major ups and downs in the economy.” In keeping with that spirit, the People’s Bank of China has raised both lending rates and bank reserve requirements in an effort to slow investment spending. And the National Development and Reform Commission (NDRC) -- the modern-day counterpart of China’s old central planning agency -- has issued some administrative
directives aimed at constraining project approvals in several overheated Chinese industries -- namely, aluminium, cement, ferrous alloys, coal, coking coal, carbide-based PVC, and residential construction activity. Make no mistake, official China is very unhappy with the current excessive rate of economic growth. This came!
through loud and clear in my discussions with senior Chinese officials during three visits in the past three months.
The problem is that China is lacking in standard options to slow its white-hot economy. The main reason is limited monetary policy traction -- the most potent counter-cyclical stabilization tool in the macro policy arsenal. The efficacy of Chinese monetary policy is frustrated by two structural shortcomings -- undeveloped capital markets, which limit the impact of interest rate fluctuations on corporate borrowing, and a highly fragmented banking system, which diffuses the transmission of centralized policy directives. Several operational constraints also mute the
impacts of Chinese monetary policy -- especially, a tightly managed currency regime that compromises the independence of the People’s Bank of China and ongoing concerns over social stability, which biases wary authorities toward incremental actions.
China’s latest batch of economic statistics attests to the relative impotence of its
counter-cyclical policy approach. The first round of monetary tightening actions taken this spring -- a 27 bp hike in bank lending rates together with a 50 bp increase in bank reserve ratios -- were identical to those implemented during the overheating of 2004. If they didn’t work back then, it is highly unlikely they will work today. Inasmuch as the economy has grown by another 35% in nominal terms since 2004, the current overheating problems are actually far more serious than they
were just two years ago (see my 19 June 2006 essay, “Scale and the Chinese Policy Challenge”). In this context, Chinese authorities have no choice other than to up the ante on policy restraint. A failure to act could see an overheated economy quickly come to a boil.
Most believe the People’s Bank of China will lead the charge in acting to slow the Chinese economy. I don’t. The 21 July announcement of a second 50 bp increase in bank reserve ratios is certainly an important nod in that direction. But the risk is that these actions are simply not enough to temper the excesses of the Chinese boom. A fragmented banking system -- with China’s “big four” banks collectively having over 75,000 branches -- underscores the autonomy of “directed lending” at the local level that is likely to remain unconstrained by another round of incremental monetary
tightening measures. Moreover, with China’s banking system -- especially its biggest banks --running a chronic excess reserve position for interbank settlement and liquidity-management needs, this latest increase in bank reserve ratios is unlikely to have much of an impact on the still vigorous expansion of credit (see M. Goodfriend and E. Prasad, “A Framework for Independent Monetary Policy in China,” IMF Working Paper, April 2006). In other words, in contrast with the incremental tightening preferences of ever-cautious senior Chinese officials, the big risk of the boom is that it will now take a far more aggressive monetary tightening to slow this fast-moving train.
I think the odds of such a draconian shift in Chinese monetary policy are low. It would only heighten the risks of sharp curtailment in credit and a related increase in unemployment -- an unacceptable outcome for a Chinese leadership that has long put its highest priority on social stability. In the absence of more aggressive monetary tightening, the onus of policy restraint would have to fall more on administrative actions. That seems likely to thrust the NDRC into the limelight as the major actor in the Chinese policy arena. Accordingly, I would not be surprised if Chairman Ma Kai of the NDRC announces a major broadening of industries and regions to be targeted
for restraints on project finance. Such a policy approach favoring quantity restraints over interest rate signals could well represent a setback on the road to reform. But given China’s blended system of ownership and a still embryonic market system, there is really no other option. A key lesson from all of this is the urgency for China to move ahead rapidly on banking reform. Only then can a fragmented
system be centralized, enabling monetary policy to achieve the traction that China needs for macro control.
I have never bought into the China-collapse scenarios that have long been so fashionable in the West. Time and again, China has shown a remarkable ability to withstand severe external blows -- most recently, from the Asian financial crisis of 1997-98 and the bubble-induced global recession of 2000-01. I remain hopeful of a similar outcome this time, as well. At the same time, I would be the first to concede that China now faces major internal challenges that could actually be far
more vexing. Unlike the external shocks which China was able to counter by drawing on its massive reservoir of domestic saving as a source of stimulus, the current internal pressures will require the authorities to impose significant policy restraint. By waiting until the economy has overheated and is at risk of veering out of control, the need to act -- and act decisively -- has become more urgent. Nor can China rely on orthodox stabilization efforts to get the job done. Its central planners are likely to be more important than its central bankers in regaining control over a runaway economy.
All this raises the odds of a more abrupt China slowdown -- along with related downside risks to pan-Asian exports, commodity prices, and oil demand. I am not in the China hard-landing camp. But the administrative policy tightening I now envision suggests that the coming downshift in Chinese economic growth could well be a good deal bumpier than widely thought. The longer China waits, the bigger the bumps.
Global: China's Control Problem
Stephen S. Roach (New York)
Morgan Stanley
July 21, 2006
It’s one thing for small, early-stage developing countries to experience periodic spurts of hyper-growth. It’s another matter altogether when that happens for large, mid-stage developing economies. That’s precisely the case in China today where extremely rapid economic growth seems in danger of veering out of control. Unfortunately, without an effective policy arsenal and more of a market-based system, it is very difficult for incrementally-inclined Chinese authorities to temper
the excesses of the boom. Nor is the just-announced second tweak in bank reserve ratios likely to make much of a difference. The risk is the longer the boom runs, the tougher it will be to avoid a more treacherous endgame.
The latest Chinese growth numbers were off the charts. Never mind the decade-high 11.3% y-o-y comparison just released for real GDP in 2Q06. What caught my eye was the 19.5% surge of industrial output in June. With a relatively small services sector and a highly inefficient agricultural sector, the Chinese growth story has long been dominated by the more reliably measured ups and downs of manufacturing activity. Other than a few monthly comparisons that were distorted by calendar-year effects during lunar New Year celebrations, our China team believes this is the
strongest industrial output comparison that China has ever reported. Nor is there any secret as to the forces that are behind this boom. It continues to be concentrated in two sectors -- fixed investment and exports -- that now account for more than 80% of total Chinese GDP. Collectively, these sectors surged ahead by nearly a 30% y-o-y rate in 2Q06.
This is not a sustainable outcome for any economy. Sure, China is special, with its economic development dominated by urbanization, infrastructure, and industrialization. These are all capital-intensive activities that would naturally bias the investment share of Chinese GDP to the upside. At the same time, lacking in support from internal private consumption and bolstered by massive fixed investments by foreign multinational corporations, China’s low-cost export-led impetus also makes good sense. But this unbalanced growth model has now gone to excess. Even in their heydays, investment shares in Japan and Korea never went above 40% of GDP; China’s investment ratio is likely to hit 50% this year -- underscoring the growing risk of a major overhang of excess supply. Similarly, Chinese export momentum has encountered increasingly tough political resistance that has been manifested in the form of mounting trade frictions and protectionist risks. Moreover, China is struggling mightily with the consequences of its industrial boom -- namely, soaring prices of energy and other industrial materials, severe environmental degradation, and mounting risks of bottlenecks that have the potential to crimp economic activity.
Senior Chinese authorities have expressed considerable concern over this overheated state of affairs. On a recent visit to the Henan province, Premier Wen Jiabao stressed, “We need to prevent unhealthy and unstable situations and the imbalances that can occur during fast economic development to prevent major ups and downs in the economy.” In keeping with that spirit, the People’s Bank of China has raised both lending rates and bank reserve requirements in an effort to slow investment spending. And the National Development and Reform Commission (NDRC) -- the modern-day counterpart of China’s old central planning agency -- has issued some administrative
directives aimed at constraining project approvals in several overheated Chinese industries -- namely, aluminium, cement, ferrous alloys, coal, coking coal, carbide-based PVC, and residential construction activity. Make no mistake, official China is very unhappy with the current excessive rate of economic growth. This came!
through loud and clear in my discussions with senior Chinese officials during three visits in the past three months.
The problem is that China is lacking in standard options to slow its white-hot economy. The main reason is limited monetary policy traction -- the most potent counter-cyclical stabilization tool in the macro policy arsenal. The efficacy of Chinese monetary policy is frustrated by two structural shortcomings -- undeveloped capital markets, which limit the impact of interest rate fluctuations on corporate borrowing, and a highly fragmented banking system, which diffuses the transmission of centralized policy directives. Several operational constraints also mute the
impacts of Chinese monetary policy -- especially, a tightly managed currency regime that compromises the independence of the People’s Bank of China and ongoing concerns over social stability, which biases wary authorities toward incremental actions.
China’s latest batch of economic statistics attests to the relative impotence of its
counter-cyclical policy approach. The first round of monetary tightening actions taken this spring -- a 27 bp hike in bank lending rates together with a 50 bp increase in bank reserve ratios -- were identical to those implemented during the overheating of 2004. If they didn’t work back then, it is highly unlikely they will work today. Inasmuch as the economy has grown by another 35% in nominal terms since 2004, the current overheating problems are actually far more serious than they
were just two years ago (see my 19 June 2006 essay, “Scale and the Chinese Policy Challenge”). In this context, Chinese authorities have no choice other than to up the ante on policy restraint. A failure to act could see an overheated economy quickly come to a boil.
Most believe the People’s Bank of China will lead the charge in acting to slow the Chinese economy. I don’t. The 21 July announcement of a second 50 bp increase in bank reserve ratios is certainly an important nod in that direction. But the risk is that these actions are simply not enough to temper the excesses of the Chinese boom. A fragmented banking system -- with China’s “big four” banks collectively having over 75,000 branches -- underscores the autonomy of “directed lending” at the local level that is likely to remain unconstrained by another round of incremental monetary
tightening measures. Moreover, with China’s banking system -- especially its biggest banks --running a chronic excess reserve position for interbank settlement and liquidity-management needs, this latest increase in bank reserve ratios is unlikely to have much of an impact on the still vigorous expansion of credit (see M. Goodfriend and E. Prasad, “A Framework for Independent Monetary Policy in China,” IMF Working Paper, April 2006). In other words, in contrast with the incremental tightening preferences of ever-cautious senior Chinese officials, the big risk of the boom is that it will now take a far more aggressive monetary tightening to slow this fast-moving train.
I think the odds of such a draconian shift in Chinese monetary policy are low. It would only heighten the risks of sharp curtailment in credit and a related increase in unemployment -- an unacceptable outcome for a Chinese leadership that has long put its highest priority on social stability. In the absence of more aggressive monetary tightening, the onus of policy restraint would have to fall more on administrative actions. That seems likely to thrust the NDRC into the limelight as the major actor in the Chinese policy arena. Accordingly, I would not be surprised if Chairman Ma Kai of the NDRC announces a major broadening of industries and regions to be targeted
for restraints on project finance. Such a policy approach favoring quantity restraints over interest rate signals could well represent a setback on the road to reform. But given China’s blended system of ownership and a still embryonic market system, there is really no other option. A key lesson from all of this is the urgency for China to move ahead rapidly on banking reform. Only then can a fragmented
system be centralized, enabling monetary policy to achieve the traction that China needs for macro control.
I have never bought into the China-collapse scenarios that have long been so fashionable in the West. Time and again, China has shown a remarkable ability to withstand severe external blows -- most recently, from the Asian financial crisis of 1997-98 and the bubble-induced global recession of 2000-01. I remain hopeful of a similar outcome this time, as well. At the same time, I would be the first to concede that China now faces major internal challenges that could actually be far
more vexing. Unlike the external shocks which China was able to counter by drawing on its massive reservoir of domestic saving as a source of stimulus, the current internal pressures will require the authorities to impose significant policy restraint. By waiting until the economy has overheated and is at risk of veering out of control, the need to act -- and act decisively -- has become more urgent. Nor can China rely on orthodox stabilization efforts to get the job done. Its central planners are likely to be more important than its central bankers in regaining control over a runaway economy.
All this raises the odds of a more abrupt China slowdown -- along with related downside risks to pan-Asian exports, commodity prices, and oil demand. I am not in the China hard-landing camp. But the administrative policy tightening I now envision suggests that the coming downshift in Chinese economic growth could well be a good deal bumpier than widely thought. The longer China waits, the bigger the bumps.
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Wednesday, July 26, 2006
That is not to say that the Jiang camp is "sitting idly by." The PBOC website just posted VP Huang Ju's most recent "instruction" to the banks. Of course, it is the strongest signal since Huang's reappearance that he remains in charge of the financial sector. Note, what he is saying is slightly different from what Hu-Wen said recently about the macro-economic policy. It sounds very much like tea-leaf reading--and it is--yet I think it is not trivial. In Huang's comment, he says that
the PBOC should "ensure that the national economy can maintain stable, high-speed growth," while Wen said today at the national economic TV and telephone conference that all members of the government should "promote the stable, relatively fast, coordinated development of the economy." Clearly, Wen has something "slower" in mind than Huang, as well as much more central coordination. Huang likely favors more autonomy by east-coast provinces.
黄菊对人行党建工作和金融服务工作作重要批示
新华网北京7月25日电 记者日前从人民银行召开的专项研究部署党建工作和金融服务工作的有关会议上获悉，中共中央政治局常委、国务院副总理黄菊7月20日对人民银行党建工作和金融服务工作作出重要批示。
黄菊指出，进一步做好人民银行系统党建工作，加强思想政治工作和干部队伍建设，增强金融服务意识，改进和创新金融服务，提高金融服务水平、质量和效率，是全面贯彻落实科学发展观的重要内容，也是正确制定和实施货币政策、维护金融稳定的基础和保障。
黄菊强调，当前，要根据国民经济的发展态势和宏观调控的需要，切实加强对国际国内经济金融形势的跟踪、分析和研究，进一步提高前瞻性、预见性和主动性，为党中央、国务院制定宏观调控政策提供及时、准确的建议和意见，为确保国民经济继续保持平稳快速增长提供高水平的金融服务。（完）
温家宝：促进经济平稳较快协调发展
2006年07月26日18:45 【字号 大 中 小】【留言】【论坛】【打印】【关闭】
新华社北京７月２６日电 国务院２６日召开全国电视电话会议，通报上半年经济形势，部署下半年经济工作。中共中央政治局常委、国务院总理温家宝在会上作重要讲话。他强调，要坚持以科学发展观为指导，正确认识当前经济形势，统一思想，坚定信心，完善政策，明确任务，狠抓落实，促进经济平稳较快协调发展。
会议由中共中央政治局常委、国务院副总理黄菊主持。国务院副总理吴仪、曾培炎、回良玉，国务委员曹刚川、唐家璇、华建敏、陈至立出席会议。
温家宝在讲话中全面分析了当前经济形势。他说，今年以来，国民经济总体形势是好的。经济平稳快速发展，夏粮再获丰收，工业结构调整步伐加快，煤电运支撑条件改善，经济效益继续提高，消费增长趋旺，物价基本平稳，人民生活进一步改善，社会事业发展迈出新步伐，重点领域改革不断深化。经济社会发展和改革开放取得了显著成就。但是，经济运行中的问题也很突出。主要是：固定资产投资增长过快并呈加剧之势，货币信贷投放仍然过多，国际收支不平衡加剧，能源消耗过多，环境压力加大。必须采取有力措施，解决存在的突出矛盾和问题，防止经济增长由偏快转为过热。
温家宝指出，下半年经济工作要坚持以邓小平理论和“三个代表”重要思想为指导，全面贯彻落实科学发展观，更加重视调整经济结构和转变增长方式，更加重视节约资源和保护环境，更加重视社会发展和民生，更加重视从体制机制上解决深层次问题，把各方面发展的积极性引导好、保护好、发挥好，促进经济社会转入全面协调可持续发展轨道。
温家宝强调，要全面贯彻中央对经济工作的决策和部署，加强和改善宏观调控，增强调控的预见性、针对性、综合性和有效性。预见性，就是不仅要看当前，还要看长远，不仅看国内，还要看国际；针对性，就是要找准问题，区别对待，确保重点；综合性，就是要采用经济的、法律的手段和必要的行政手段，特别要通过改革解决体制和机制上的问题；有效性，就是调控要适时适度管用。
温家宝指出，当前要着力做好几项重点工作。（一）继续促进农业发展和农民增收。抓好秋粮生产，力争实现全年粮食生产稳定发展。落实粮食最低收购价政策，加大农资市场监管力度，继续拓宽农民增收渠道。深化农村综合改革。新农村建设要把重点放在发展农业生产和农民增收上，力戒形式主义。（二）坚决抑制固定资产投资过快增长。关键要切实把好土地闸门、信贷闸门、市场准入门槛。加强土地调控和管理，落实土地管理和耕地保护目标责任制，严格用地审批管理，加大违法违规用地查处力度。强化征地补偿制度，规范土地出让收支管理。合理调控货币信贷增长，采取综合措施回收银行体系流动性，着力优化贷款结构。完善人民币汇率形成机制，逐步增强汇率浮动的弹性。加强市场准入的审核和监督检查，全面清理新开工项目，严格审查各类拟建项目，完善行业市场准入标准。（三）继续加强房地产市场调控。推行符合国情的住房建设模式和消费模式，着力调整住房供给结构，继续整顿和规范房地产市场秩序，坚决遏制部分城市住房价格过快上涨。（四）切实加大节能降耗和环保工作力度。落实节能目标责任制，抓好重点企业节能和重大节能工程，加快构建节能型的产业结构，完善促进节能的体制机制和政策措施，健全能耗公报制度。尽快将二氧化硫和化学需氧量排放总量控制的目标责任分解落实到市（地）、县和重点排污单位。着力推进重点流域和区域污染治理，加大环境监测和执法力度。（五）努力扩大消费需求。增加居民特别是城镇低收入居民和农民收入，落实最低工资标准，抓紧建立小时最低工资制度、农民工工资支付保障体系。改善消费环境。（六）大力推进结构调整。加快发展服务业。积极发展能耗低、污染少的高新技术产业，控制高耗能、高污染工业发展。推进科技、教育事业发展。（七）着力深化各项改革。坚持社会主义市场经济改革方向，更大程度地发挥市场配置资源的基础性作用，加快完善市场体系、宏观调控体系，建立落实科学发展观的体制机制保障。特别要加快推进涉及政府职能转变的改革，真正实行政企分开。（八）进一步提高对外开放水平。着力推进贸易增长方式转变，积极调整和优化进出口结构。注重提高利用外资质量，规范招商引资行为。积极支持有条件的企业走出去投资兴业。（九）认真解决涉及人民群众利益的问题。积极解决就业、就学、医疗、征地拆迁、企业改制、环境污染、安全生产等方面群众反映突出的问题。切实加强防灾救灾工作。维护社会和谐稳定。
温家宝最后就做好下半年经济工作提出了三点要求。第一，统一思想认识，坚持科学发展。各地方、各部门要切实把思想统一到中央对当前经济形势的判断上来，统一到中央的方针政策和工作部署上来，牢固树立和全面落实科学发展观。第二，增强大局意识，做到令行禁止。认真贯彻中央的决策和部署，确保政令畅通，坚决维护中央宏观调控的统一性、权威性、有效性。第三，狠抓政策落实，注重工作实效，全面落实工作责任制，建立健全问责制，加强督促检查。
参加会议的有，各省（区、市）党委、政府主要负责人以及市（地）、县（市、区）党委、政府主要负责人和有关部门负责人，国务院有关部门主要负责人和武警部队负责人、部分中央企业主要负责人。中共中央、全国人大、全国政协、最高人民法院、最高人民检察院有关部门负责人也应邀参加会议。（完）
the PBOC should "ensure that the national economy can maintain stable, high-speed growth," while Wen said today at the national economic TV and telephone conference that all members of the government should "promote the stable, relatively fast, coordinated development of the economy." Clearly, Wen has something "slower" in mind than Huang, as well as much more central coordination. Huang likely favors more autonomy by east-coast provinces.
黄菊对人行党建工作和金融服务工作作重要批示
新华网北京7月25日电 记者日前从人民银行召开的专项研究部署党建工作和金融服务工作的有关会议上获悉，中共中央政治局常委、国务院副总理黄菊7月20日对人民银行党建工作和金融服务工作作出重要批示。
黄菊指出，进一步做好人民银行系统党建工作，加强思想政治工作和干部队伍建设，增强金融服务意识，改进和创新金融服务，提高金融服务水平、质量和效率，是全面贯彻落实科学发展观的重要内容，也是正确制定和实施货币政策、维护金融稳定的基础和保障。
黄菊强调，当前，要根据国民经济的发展态势和宏观调控的需要，切实加强对国际国内经济金融形势的跟踪、分析和研究，进一步提高前瞻性、预见性和主动性，为党中央、国务院制定宏观调控政策提供及时、准确的建议和意见，为确保国民经济继续保持平稳快速增长提供高水平的金融服务。（完）
温家宝：促进经济平稳较快协调发展
2006年07月26日18:45 【字号 大 中 小】【留言】【论坛】【打印】【关闭】
新华社北京７月２６日电 国务院２６日召开全国电视电话会议，通报上半年经济形势，部署下半年经济工作。中共中央政治局常委、国务院总理温家宝在会上作重要讲话。他强调，要坚持以科学发展观为指导，正确认识当前经济形势，统一思想，坚定信心，完善政策，明确任务，狠抓落实，促进经济平稳较快协调发展。
会议由中共中央政治局常委、国务院副总理黄菊主持。国务院副总理吴仪、曾培炎、回良玉，国务委员曹刚川、唐家璇、华建敏、陈至立出席会议。
温家宝在讲话中全面分析了当前经济形势。他说，今年以来，国民经济总体形势是好的。经济平稳快速发展，夏粮再获丰收，工业结构调整步伐加快，煤电运支撑条件改善，经济效益继续提高，消费增长趋旺，物价基本平稳，人民生活进一步改善，社会事业发展迈出新步伐，重点领域改革不断深化。经济社会发展和改革开放取得了显著成就。但是，经济运行中的问题也很突出。主要是：固定资产投资增长过快并呈加剧之势，货币信贷投放仍然过多，国际收支不平衡加剧，能源消耗过多，环境压力加大。必须采取有力措施，解决存在的突出矛盾和问题，防止经济增长由偏快转为过热。
温家宝指出，下半年经济工作要坚持以邓小平理论和“三个代表”重要思想为指导，全面贯彻落实科学发展观，更加重视调整经济结构和转变增长方式，更加重视节约资源和保护环境，更加重视社会发展和民生，更加重视从体制机制上解决深层次问题，把各方面发展的积极性引导好、保护好、发挥好，促进经济社会转入全面协调可持续发展轨道。
温家宝强调，要全面贯彻中央对经济工作的决策和部署，加强和改善宏观调控，增强调控的预见性、针对性、综合性和有效性。预见性，就是不仅要看当前，还要看长远，不仅看国内，还要看国际；针对性，就是要找准问题，区别对待，确保重点；综合性，就是要采用经济的、法律的手段和必要的行政手段，特别要通过改革解决体制和机制上的问题；有效性，就是调控要适时适度管用。
温家宝指出，当前要着力做好几项重点工作。（一）继续促进农业发展和农民增收。抓好秋粮生产，力争实现全年粮食生产稳定发展。落实粮食最低收购价政策，加大农资市场监管力度，继续拓宽农民增收渠道。深化农村综合改革。新农村建设要把重点放在发展农业生产和农民增收上，力戒形式主义。（二）坚决抑制固定资产投资过快增长。关键要切实把好土地闸门、信贷闸门、市场准入门槛。加强土地调控和管理，落实土地管理和耕地保护目标责任制，严格用地审批管理，加大违法违规用地查处力度。强化征地补偿制度，规范土地出让收支管理。合理调控货币信贷增长，采取综合措施回收银行体系流动性，着力优化贷款结构。完善人民币汇率形成机制，逐步增强汇率浮动的弹性。加强市场准入的审核和监督检查，全面清理新开工项目，严格审查各类拟建项目，完善行业市场准入标准。（三）继续加强房地产市场调控。推行符合国情的住房建设模式和消费模式，着力调整住房供给结构，继续整顿和规范房地产市场秩序，坚决遏制部分城市住房价格过快上涨。（四）切实加大节能降耗和环保工作力度。落实节能目标责任制，抓好重点企业节能和重大节能工程，加快构建节能型的产业结构，完善促进节能的体制机制和政策措施，健全能耗公报制度。尽快将二氧化硫和化学需氧量排放总量控制的目标责任分解落实到市（地）、县和重点排污单位。着力推进重点流域和区域污染治理，加大环境监测和执法力度。（五）努力扩大消费需求。增加居民特别是城镇低收入居民和农民收入，落实最低工资标准，抓紧建立小时最低工资制度、农民工工资支付保障体系。改善消费环境。（六）大力推进结构调整。加快发展服务业。积极发展能耗低、污染少的高新技术产业，控制高耗能、高污染工业发展。推进科技、教育事业发展。（七）着力深化各项改革。坚持社会主义市场经济改革方向，更大程度地发挥市场配置资源的基础性作用，加快完善市场体系、宏观调控体系，建立落实科学发展观的体制机制保障。特别要加快推进涉及政府职能转变的改革，真正实行政企分开。（八）进一步提高对外开放水平。着力推进贸易增长方式转变，积极调整和优化进出口结构。注重提高利用外资质量，规范招商引资行为。积极支持有条件的企业走出去投资兴业。（九）认真解决涉及人民群众利益的问题。积极解决就业、就学、医疗、征地拆迁、企业改制、环境污染、安全生产等方面群众反映突出的问题。切实加强防灾救灾工作。维护社会和谐稳定。
温家宝最后就做好下半年经济工作提出了三点要求。第一，统一思想认识，坚持科学发展。各地方、各部门要切实把思想统一到中央对当前经济形势的判断上来，统一到中央的方针政策和工作部署上来，牢固树立和全面落实科学发展观。第二，增强大局意识，做到令行禁止。认真贯彻中央的决策和部署，确保政令畅通，坚决维护中央宏观调控的统一性、权威性、有效性。第三，狠抓政策落实，注重工作实效，全面落实工作责任制，建立健全问责制，加强督促检查。
参加会议的有，各省（区、市）党委、政府主要负责人以及市（地）、县（市、区）党委、政府主要负责人和有关部门负责人，国务院有关部门主要负责人和武警部队负责人、部分中央企业主要负责人。中共中央、全国人大、全国政协、最高人民法院、最高人民检察院有关部门负责人也应邀参加会议。（完）
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Dear Readers, so former Beijing PS was recently released for "medical reason." Of course, he is said to be in quite good health in reality. I agree with the assessment that it might well be a maneuver by Hu to put more pressure on Jiang's faction in the run-up to the 17th Party Congress. It is widely believed that Chen was harshly punished for what today would be a minor infraction as a part of Jiang's consolidation of power in the mid 90s. Chen's release might rally Chen's remnant faction to "retaliate" against the Jiang camp in some fashion......
FT News, Education
Disgraced former party chief freed on medical parole
492 words
24 July 2006
South China Morning Post
1
English
(c) 2006 South China Morning Post Publishers Limited, Hong Kong. All rights reserved.
Former Beijing party boss Chen Xitong has been released on medical parole after serving eight years of his 16-year jail sentence for corruption in one of the most high-profile cases to affect the top echelons of the Communist Party leadership.
Separately, former China Everbright Holdings chairman Zhu Xiaohua has also been released on medical parole after serving four years of a 15-year sentence for corruption.
Sources close to Mr Chen said the 76-year-old was recently released into a top Beijing military hospital for treatment of unspecified illnesses.
However, Mr Chen was not expected to regain complete freedom and was most likely to have his movements restricted due to parole conditions and political reasons, the sources said.
Authorities are now trying to determine the pay entitlements for Mr Chen, who was a Politburo member and the mainland's eighth-ranked leader before his fall from power in 1995 and imprisonment in 1998.
Mr Zhu, 57, was recently released and is now recuperating in Shanghai, where he first made his mark as a respected banker. He became one of the mainland's most visible financial officials before his imprisonment in 2002.
Friends of Mr Zhu said he had deliberately kept a low profile and his release was known to only a small group of friends and family.
Senior mainland officials who are sentenced to long prison sentences on corruption charges can usually gain freedom on medical parole after serving three or four years. But the release of Mr Chen came as a surprise to many observers in Beijing as previous reports indicated he had refused an offer of medical parole, insisting he be released unconditionally as he was innocent and not ill.
In 1995, the mainland leadership sacked Mr Chen as party secretary of Beijing, saying he was involved in a spate of corruption scandals also involving family members and associates, including former Beijing executive deputy mayor Wang Baosen , who later killed himself.
In 1998, Mr Chen was sentenced to 16 years' jail on charges of corruption and dereliction of duty.
But many of his supporters believed the sentence was politically motivated because Mr Chen was known as the leader of a party faction involved in a long and bitter rivalry with then president Jiang Zemin .
Many observers said Mr Zhu suffered a similar fate when he was sentenced to 15 years in prison in 2002, three years after he was first detained. He was convicted of accepting bribes worth 4.05 million yuan in stock and cash between 1997 and 1999, when he was chairman of China Everbright, one of the mainland's leading investment conglomerates.
Many believe he was a victim of the political maneuvering among senior leaders in the run-up to the 16th party congress in which a major leadership reshuffle took place. He was known as a protege of former premier Zhu Rongji .
Document SCMP000020060723e27o0001e
FT News, Education
Disgraced former party chief freed on medical parole
492 words
24 July 2006
South China Morning Post
1
English
(c) 2006 South China Morning Post Publishers Limited, Hong Kong. All rights reserved.
Former Beijing party boss Chen Xitong has been released on medical parole after serving eight years of his 16-year jail sentence for corruption in one of the most high-profile cases to affect the top echelons of the Communist Party leadership.
Separately, former China Everbright Holdings chairman Zhu Xiaohua has also been released on medical parole after serving four years of a 15-year sentence for corruption.
Sources close to Mr Chen said the 76-year-old was recently released into a top Beijing military hospital for treatment of unspecified illnesses.
However, Mr Chen was not expected to regain complete freedom and was most likely to have his movements restricted due to parole conditions and political reasons, the sources said.
Authorities are now trying to determine the pay entitlements for Mr Chen, who was a Politburo member and the mainland's eighth-ranked leader before his fall from power in 1995 and imprisonment in 1998.
Mr Zhu, 57, was recently released and is now recuperating in Shanghai, where he first made his mark as a respected banker. He became one of the mainland's most visible financial officials before his imprisonment in 2002.
Friends of Mr Zhu said he had deliberately kept a low profile and his release was known to only a small group of friends and family.
Senior mainland officials who are sentenced to long prison sentences on corruption charges can usually gain freedom on medical parole after serving three or four years. But the release of Mr Chen came as a surprise to many observers in Beijing as previous reports indicated he had refused an offer of medical parole, insisting he be released unconditionally as he was innocent and not ill.
In 1995, the mainland leadership sacked Mr Chen as party secretary of Beijing, saying he was involved in a spate of corruption scandals also involving family members and associates, including former Beijing executive deputy mayor Wang Baosen , who later killed himself.
In 1998, Mr Chen was sentenced to 16 years' jail on charges of corruption and dereliction of duty.
But many of his supporters believed the sentence was politically motivated because Mr Chen was known as the leader of a party faction involved in a long and bitter rivalry with then president Jiang Zemin .
Many observers said Mr Zhu suffered a similar fate when he was sentenced to 15 years in prison in 2002, three years after he was first detained. He was convicted of accepting bribes worth 4.05 million yuan in stock and cash between 1997 and 1999, when he was chairman of China Everbright, one of the mainland's leading investment conglomerates.
Many believe he was a victim of the political maneuvering among senior leaders in the run-up to the 16th party congress in which a major leadership reshuffle took place. He was known as a protege of former premier Zhu Rongji .
Document SCMP000020060723e27o0001e
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Saturday, July 15, 2006
Here is Sichuan, the weather is almost unbearable. However, that is what academia demands.....Let's see what my days of wining and dining with officials have yielded lately. One interesting thing is that in response to calls of "new socialist countryside," various local governments are responding with different "policy innovation." One thing that I heard about in a major city in Sichuan is the "amalgamation of city and countryside," which attempts to forcibly speed up the pace of urbanization. There are two tactics. First, you forcibly relocate some farmers into cities, forcing many of them to commute back to the villages to farm. Second, you forcibly combine villages into townships and townships into cities to create more cities. This generate a lot of administrative difficulties. Well, this is what Chinese officials have to do to get ahead.
Beyond that, I heard that Liu Zhihua's (Beijing vice-mayor, see previous post) accuser was in fact not a foreign investor, as originally thought, but rather a princeling who registered a company abroad. Contrary to my expectation, I further heard that Liu's arrest actually caused Mayor Wang Qishan a lot of embarassment. Although Wang is not close to Liu, he originally appointed Liu to the post, not knowing the full extent of his wrong-doing. Clearly, something very complicated is going on, and perhaps some readers can shed some light on this. We will see how much further this investigation goes, and whether it will spread to Shanghai, as some people speculate.
Beyond that, I heard that Liu Zhihua's (Beijing vice-mayor, see previous post) accuser was in fact not a foreign investor, as originally thought, but rather a princeling who registered a company abroad. Contrary to my expectation, I further heard that Liu's arrest actually caused Mayor Wang Qishan a lot of embarassment. Although Wang is not close to Liu, he originally appointed Liu to the post, not knowing the full extent of his wrong-doing. Clearly, something very complicated is going on, and perhaps some readers can shed some light on this. We will see how much further this investigation goes, and whether it will spread to Shanghai, as some people speculate.
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Monday, July 10, 2006
Here in Beijing, rumors are already flying about the 17th Party Congress, which is scheduled to occur next autumn. Among the more interesting rumor, one rumor, which is highly dubious, but interesting, is that some in the party wants to push up the party congress to spring of 2007, instead of the fall. The putative reason is that since there will be elections in both the US and in Taiwan in the fall, China needs an established leadership before that time. Of course, that is just an excuse. If the rumor is true--and there is little reason to think so-- it is probably prompted by the Jiang-Zeng camp to prevent Hu from getting his slate of central committee members. Although party elections are trumped up affairs, they nonetheless require some preparation. By pushing the party congress forward, Hu will have much less time with which to prepare the representatives to the Party Congress to support an entirely pro-Hu slate for the Central Committee. The Jiang-Zeng camp would thus be able to maintain a sizable presence in the CC, and thus the Politburo and the Standing Committee. Of course, this is just speculation on an unconfirmed rumor.
Back on slightly more solid ground, Huang Ju is back on a very light load of work. Since his reappearance in early June, he has attended three events: the CAS ceremony, Hu's speech on the 85th anniversary of the CCP, and a meeting with the foreign advisory panel of the CBRC. I attach a picture of him at the CBRC meeting. He looks better, but still much thinner than before. I think his appearance at the CBRC meeting is very important, since he is showing that even if some of the minor portfolios have been delegated to others, he remains in charge of the finance portfolio. Before the folks at Citibank get too excited, however, he is surely focusing all of his diminished energy on the up-coming 17th Party Congress, where he, Jiang, and Zeng must do all that they can to prevent a complete Hu take-over.
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Victor,
I just found this blog via FEER. And I’m totally fascinated by it. This is the kind of thing I love to read… Mature, insightful, balanced and well-written stuff about China. Splendid!
I just found this blog via FEER. And I’m totally fascinated by it. This is the kind of thing I love to read… Mature, insightful, balanced and well-written stuff about China. Splendid!
i like the honesty in your blogs.
do you have any fear about being so "open" in your opinions and comments?
do you have any fear about being so "open" in your opinions and comments?
# posted by 
: 7:09 AM
: 7:09 AM
I like your blogs,maybe you noted the new action of shanghai,chen was replaced by han cause of corruption.I think there must be a lot of interesting things you want to take about.Watiing for your further interpretion.
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# posted by : 11:12 PM
: 11:12 PM
