Report filled with optimism of economy and indications that nation is paying more attention to people's livelihood

Premier Wen Jiabao mapped out a conservative target for this year's economic development covering the growth rate of gross domestic product (GDP), bank lending and the consumer price index in his government work report to the third session of the 11th National People's Congress (NPC) that concluded Sunday.

But the central government is still optimistic that the economy will continue its upward trend after the global economic recession, according to messages from the annual two sessions of the NPC, the top legislature, and the Chinese People's Political Consultative Conference (CPPCC) National Committee, the advisory body.

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The numerous stimulus packages launched by the government since late 2008 to stem the economic downturn helped pull the country's economy back on track to rapid growth, as last year's 8.7 percent growth rate shows.

Investments, spending and exports, three major factors that drive a country's economy, are expected to rise from last year's momentum.

Due to the country's 4 trillion yuan ($586 billion) investments plan, large-scale projects that started last year are expected to continue into this year and new projects could begin this year.

As a sector that has always expended much of China's fixed asset investments, the real estate market could experience a drop in home sales and prices following a series of policies and measures by the central and local governments aimed to curb home prices. But investments in the housing market are still expected to boom.

The system of selling homes prior to the opening day has long prevailed in China's real estate market. But government policies and measures will possibly produce delayed effects on the sector. Last year's stunning performances in home sales are likely to boost housing investments this year. Due to its role in driving investment to other industries, real estate is expected to boost the country's fixed asset investments and in turn boost economic growth.

Having endured the most difficult year in decades, the global economy managed to gain some footing late last year. A rosier exports sector that grew in the first two months of this year, combined with the struggles from domestic enterprises to restructure industrially, will help the economy maintain last year's solid momentum.

The issue of China's renminbi exchange rate remains one of the biggest uncertainties in the country's economic development. Because some Western countries, especially the United States, are still mired under growing unemployment and export pressures, their accusations of China are growing louder. They are accusing China of undervaluing its currency and have called for China to appreciate its value against other currencies. Whether or not China keeps the yuan's exchange rate stable will decide whether a stable export growth can be achieved.

As the national economy recovers, the country's domestic consumption is also expected to increase this year. Under the stimulation of a series of policies and measures, China's residents have witnessed a tangible increase in income. This, along with the promotion of the country's consumption, will possibly accelerate spending either on autos or home appliances.

In his government work report, Premier Wen emphasized the country's focus is now on valuing quality over quantity. By valuing quality, the premier indicates that the country is committed to changing its past GDP-dominated economic growth model. He also suggests China aim its growth at improving people's lives and giving the majority of its people access to economic growth.

In his report, Premier Wen not only vowed to make a bigger revenue pie, but also vowed to cut the pie evenly. The commitments and concrete measures from the top leadership indicate the country's determination to improve the quality of the national economy. The country should uproot the sources that have led to an uneven distribution of wealth in order to make people enjoy the fruits of the country's booming economy.

Premier Wen's report has reassured people that the country's economy will get back on track to rapid development. What the people worry about should not be whether the country's promised 8-percent growth target is realized. What we should worry about more is whether the country takes effective measures to avoid a possibly overheated economy and extend the fruits of its economic development to its people.

The author is a researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences.

(China Daily 03/16/2010 page8)