Ma Kai, Director of China' National Development and Reform Commission, discusses the challenges facing the macro-control policy for 2007

People's Daily: The general requirements for 2007 proposed in the Central Economic Work Conference are to promote the transfer of social and economic development into a scientific development mode to achieve a sound and rapid economic development. What do you think the macro-control policy should concentrate on to achieve a sound development?

Ma Kai: In accordance with the Central Economic Work Conference, to achieve a rapid economic development in 2007 depends largely on the continuous efforts of strengthening and improving macro control.

In recent years, some problems in the country's social and economic development have been solved and the national economy is growing at a rapid pace, but we must be mindful of problems still existing in economic and social areas. From an in-depth perspective, such problems of irrational economic structure, an extensive economic growth mode, as well as deficient systems and mechanisms still remain unsolved. Currently, although the country's economy is moving towards the objective of macro-control policies, the foundation for economic development is still fragile and the economy is still developing too quickly, at a heavy cost to resources and the environment and plagued by unstable and inconsistent factors. Therefore, the major task for the macro-control policy in 2007 is to maintain a stable economic development and avoid big fluctuations.

Still Faced With an Investment Rebound

–The macro-control work in 2007 is not an easy job

Q: An important task for the macro-control work in 2006 was to carefully stabilize the overgrowth of investments, credit availability and trade surplus, with a view to preventing the overly rapid economic growth from becoming overheated. Current statistics show that the above-mentioned three problems have been eased to some extent, but some are deteriorating, posing a serious threat to the country's macro control efforts. Take the fixed assets investment for example, you have mentioned at the National Development and Reform Work Conference that investments are growing too fast, the construction scale is too big and there are still too many newly launched projects. The problems that lead to such an overgrowth of investments remain unsolved and there is still pressure from an investment rebound. What measures are to be taken in 2007 to promote macro control, especially in terms of the investment control?

A: To strengthen the control over fixed assets investments is an important task for the macro control work in 2007. Investment polices will try to curb the growth on a reasonable basis, focus on the adjustment of investment structure, improve the efficiency, to treat different programs in different ways. While the economic and legal methods will play a major role, supplemented by necessary administrative means. According to the features of different industries, in 2007 the access standard for construction projects in terms of land, environmental protection, energy conservation, technology and safety will be enhanced somewhat and more strictly implemented. New projects must meet "six necessary conditions" before they can start. They are as follows:

First, they must live up to relevant national industrial policies, development planning and market access criteria;

Second, examination and approval of investment programs should be finished in accordance with rules;  Third, prejudication of land use for construction projects should also follow rules and regulations, so that farming land transfer and land acquisition approval will be completed in accordance with laws while land use certificates are required in these projects;

Fourth, estimation on environmental impact should be made in line with rules and regulations;

Fifth, estimation work on fixed assets investments in terms of energy conservation should be completed in accordance with relevant rules and regulations; and

Sixth, all the regulations and requirements concerning credit, safety management as well as urban and rural planning should be met.

At the same time, concerning the principles of optimizing the structure, stressing the key points, strengthening the weak links and concentrating efforts to deal with major issues, the Central Government's inputs in social development should be properly used and managed: There must be an increase in the government's input to improve the living and production conditions in rural areas, to enhance such public projects as elementary education and public health, and to promote the development of China's western regions. Such economic means as subsidies, discount interest, taxation, price, etc. should be adopted while the government guiding role should be brought into play to encourage social capitals to flow into the service industry as well as energy conservation and innovation-oriented industries.

Severe Challenges Facing the Work of Energy Conservation and Emission Reduction

Q: China has seen a good beginning to the 11th "Five-Year" Plan, but we fail in one task, that is energy conservation and emission reduction. In the first half of 2006, energy consumption kept rising instead of falling. What do you expect for 2007?

A: We must have a clear mind that we still face severe challenges as far as energy goals are concerned for 2007 due to the rapid development of some high energy consuming and high pollution industries, the slow growth of the tertiary industries, the reluctance of some enterprises to adopt environment-friendly technologies, the time required for new technology to take effect, the lack of policy support in promoting energy conservation, the difficulty in setting reasonable energy prices.

Q: Are there any further measures to be taken in 2007 in terms of the energy conservation and emission reduction?

A: In 2007, efforts will be strengthened in the following aspects.

– To make the responsibility more definite. The year's energy conservation target is to be divided into detailed parts, so that every province (autonomous region and municipality) is able to instruct local cities, counties and major energy consuming enterprises as to what to do. to speed up the establishment of scientific energy conservation index system, assessment system and monitoring system.

– To attach more importance to the key areas. The work to promote energy conservation should be carefully conducted in such major industries as steel, non-ferrous metal, coal, electric power, petroleum and petrochemical, construction materials, etc and enterprises that consume more than 10,000 tons of standard coal every year. The country's ten major energy saving programs should be continued and more bond capitals should be provided to the key projects.

– To consider energy consumption from the very beginning of a program. Energy should be used as a compulsory index in program assessment. Evaluation and examination on energy consumption is to be conducted for investment projects of fixed assets. Energy efficiency criteria for major industrial equipment and products should be improved to expand the areas where the compulsory energy efficiency criteria can be used.

– To improve relevant systems and mechanisms. More reasonable differential prices of electricity and water should be worked out. At the same time, the system to charge pollution should be further developed. Relevant government departments should make joint efforts to set up special fund for energy conservation. Fiscal and tax policies that help energy conservation should be worked out.  Efforts will also be made to improve the method of power dispatching, to develop the cyclic economy and to strengthen pollution prevention and treatment.

I'd like to stress that in 2007, with energy conservation and emission reduction as the key point, strategic priority will be given to the promotion of the country's economic restructuring, of the transformation of growth mode and of the work quality and efficiency. The work as a whole is an interactive process. On one hand, only by accelerating economic restructuring and the transformation of the growth mode can we cut energy consumption and pollution discharge; on the other hand, to step up efforts on energy conservation and pollution reduction is an effective means to adjust the economic structure, transform the growth mode and promote economic efficiency.

The macro-control work in 2007 will focus on "soundness," and to achieve this goal, we must try to score substantial results in carrying out the work, by promoting the balance between speed, quality and efficiency, between consumption, investment and export and between population, resources and environment, for a sound and rapid national economic development.

(China.org.cn)