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The State Council: Fiscal And Monetary Policies, 4 Trillion Pronged Efforts To Pry Domestic Demand.

2008/11/11 9:35:00 25

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Financial And Monetary Policies Of The State Council

Premier Wen Jiabao chaired a State Council executive meeting on 5 April to study and deploy measures to further expand domestic demand and promote steady and rapid economic growth.

The meeting held that in the past two months, the world economic and financial crisis has become increasingly grim. In order to resist the adverse effects of the international economic environment on China, we must adopt a flexible prudent macroeconomic policy to cope with the complex and changeable situation.

At present, we need to implement a proactive fiscal policy and moderately loose monetary policy, introduce more effective measures to expand domestic demand, speed up livelihood projects, infrastructure, ecological environment construction and post disaster reconstruction, increase the income level of urban and rural residents, especially low-income groups, and promote stable and rapid economic growth.

The meeting identified ten measures to further expand domestic demand and promote economic growth.

First, speed up the construction of affordable housing projects.

We should increase support for the construction of low rent housing, accelerate the pformation of shanty towns, implement the settlement projects of the nomadic people, and expand the pilot projects for reconstruction of dilapidated houses in rural areas.

The two is to speed up the construction of rural infrastructure.

Efforts should be made to increase rural biogas, drinking water safety projects and rural road construction, improve rural power grids, speed up the construction of major water conservancy projects such as the south to North Water Diversion Project, and reinforce dangerous reservoirs, so as to enhance the water-saving pformation of large irrigation districts.

We should intensify efforts to help the poor.

The three is to speed up the construction of major infrastructures such as railways, highways and airports.

We will focus on the construction of a number of passenger dedicated lines, coal pport corridor projects and the Western trunk railway, improve the expressway network, arrange the construction of the airport and branch airports in the central and Western trunk lines, and speed up the pformation of urban power grids.

Four, speed up the development of medical, health and cultural undertakings.

We should strengthen the construction of the primary medical and health service system, accelerate the pformation of rural schools in the central and western regions, and promote the construction of special education schools and comprehensive cultural stations in the central and western regions.

Five is to strengthen the construction of ecological environment.

We should speed up the construction of urban sewage and garbage disposal facilities and prevent and control water pollution in key river basins, strengthen the construction of key shelterbelts and natural forest resources protection projects, and support the construction of key energy conservation and emission reduction projects.

The six is to speed up independent innovation and structural adjustment.

Support the development of high technology industrialization and industrial technology, and support the development of service industry.

The seven is to accelerate the work of post earthquake reconstruction in the earthquake stricken areas.

The eight is to increase the income of urban and rural residents.

Raise the minimum purchase price of grain next year, raise the standard of comprehensive direct subsidy for agricultural production, subsidies for fine varieties and subsidies for farm implements, and increase the income of farmers.

We should raise the level of treatment for low-income groups and other social security objects, increase the allowances for urban and rural subsistence allowances, and continue to raise the basic pension level of retirees and the standard of living allowances for those entitled to preferential treatment.

The nine is to implement the VAT reform in all regions and all sectors of the country, encourage technological pformation and reduce the burden on enterprises by 120 billion yuan.

Ten is to increase financial support for economic growth.

We should abolish restrictions on credit scale of commercial banks, expand credit scale rationally, increase credit support for key projects, "three rural", small and medium-sized enterprises, technological pformation, merger and reorganization, and foster and consolidate the growth point of consumer credit.

Preliminary calculation and implementation of the above projects will require about 4 trillion yuan by the end of 2010.

To speed up the progress of construction, the meeting decided that the central government will invest 100 billion yuan in the fourth quarter of this year. Next year, the post disaster reconstruction fund will arrange 20 billion yuan ahead of schedule, bringing about local and social investment, with a total scale of 400 billion yuan.

The meeting called for faster investment, heavier punching, accurate measures and real work.

We should emphasize the key points, conscientiously select, strengthen management, and improve quality and efficiency.

We should give priority to the planned projects, increase support, speed up the progress of the project, and launch a number of new construction projects to become a major event that the masses look forward to and have a long-term bearing on the national economy.

Insisting on promoting economic growth and promoting structural adjustment is not only conducive to stimulating the current economic growth, but also enhancing the stamina of economic development; expanding investment and stimulating consumption.

We should combine the promotion of growth and deepening reform, give full play to the role of the market in resource allocation under the state's macroeconomic regulation and control, and give full play to the two initiatives of the central government and the local government.

The meeting stressed that although we face many difficulties, the potential of China's internal demand is huge, the financial system is generally sound, and enterprises have strong awareness and ability to respond to market changes. The world economic adjustment brings new opportunities for China to speed up structural upgrading, introduce advanced technology and talents from other countries.

As long as we take decisive measures in a timely and decisive manner, grasp opportunities and meet challenges, we will be able to maintain steady and rapid economic development.