Ensuring 8 Percent Economic Growth This Year

Abstract

As one of the three main factors supporting economic growth this year, domestic consumption demand will continue to grow steadily. It is estimated that the gross retail sales of consumer goods this year will grow by 10%, and consumption demand will take up approximately 3 percentage points of the 8% of economic growth this year. However, there remain uncertainties in the promoting function of investments in fixed assets and exports for economic growth.

After July 1997, following the drastic depreciation of the Thai Baht (THB), currencies of some Southeast Asian countries and regions likewise plunged one after another, and the value of these currencies in the US stock market and HK market fell below records. In order to respond to the impact of the Asian financial crisis on China’s economy, in April 2018 I wrote the article Problems and Advice for Ensuring the 8% Growth Rate for This Year, and proposed to expand domestic demand by issuing national debt. This article was submitted to the State Council by Mr. Zeng Peiyan, the then Minister of the National Planning Commission, after which the then Premier Zhu Rongji wrote: “Li Lanqing, Wu Bangguo, Wen Jiabao, and Wu Yi, please read this article” on April 18, 1998. Wu Bangguo, Vice Premier of the State Council, wrote on April 23 that “we might be able to initiate some city building projects, such as upgrading low voltage power grids, urban transportation (rail transit in cities that have the need and resources), and city environmental protection; of course, we should avoid herd mentality, and take demand and feasibility into consideration. This is my advice for further consideration.” Li Lanqing, the then Vice Premier of the State Council, wrote on April 27, “I agree with the advice of comrade Wu Bangguo.” Wen Jiabao, the then Vice Premier of the State Council, read and noted on this article on April 22. Wu Yi, the then State Councilor, wrote on April 20 that “we must spare no effort to achieve the growth rate of 10% in export growth.” In April, the State Council decided to issue an additional 100 billion yuan of the 10 long-term construction bonds. In practice, the bonds were designed to be worth 125 billion yuan, and the bank-supported loans were 100 billion yuan. The loans were used in construction projects of transportation and communication, irrigation and water conservancy, urban infrastructure and environmental protection, the upgrading of urban and rural power grids, and economically affordable housing. National debts were issued for five years in a row. This policy greatly reversed the trend of deflation, supported economic growth, laid a strong foundation for rapid economic growth over the next decade, and successfully transformed the challenges of the Asian financial crisis into an opportunity for development.