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Economists Comment on China
Special> 2010 in Retrospect> Economists Comment on China
UPDATED: January 5, 2011 Web Exclusive
Economists Comment on China in 2010
 
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Exchange rate reforms in China implemented since 2005 has allowed the Chinese economy to remain stable while also improving the recovery rate for the global economy. "[This] shows that China's exchange rate reforms have been moving in the right direction," said Zhang. Zhang believed that accelerating transformation of economic development mode is the final solution to counter stress from RMB appreciation and tackle the problem of unbalanced international payment.

At the end of 2010, the Central Government made further adjustments to its monetary policy, making it slightly more prudent in nature. "This adjustment was an effective measure for reining in excess liquidity and inflationary expectation, and would provide a stable monetary environment for economic development," said Zhang.

Shang Fulin, Chairman of the China Securities Regulatory Commission: More institutional investment should be encouraged

The capital market has offered indispensable fundamental system for reforming and improving China's market economy. China's capital market has been widely recognized and accepted since it shows increasing effect in perfecting corporate governance, promoting capital formation, and hedging market risks.

Despite the significant improvements, there are still many changes to be made, according to Shang Fulin. He said that too many individual investors are weakening the overall investment environment, adding that several departments in the regulatory commission are working on new policies that will eventually solve this problem. Shang said that by developing and encouraging institutional investment, the government can create a safer, less risky investment environment.

Institutional investors accounted for 70 percent of China's "A share" stock sales as of the end of November 2010. Securities investments increased significantly in 2010. The practice of laws and regulations of securities investment funds has also offered precious experience for coordinative development of China's asset management industry. China's commodities futures market reached a record trade volume of over $2.1 billion in the first three quarters of 2010, making it the largest investment market of its kind in the world.

Xie Yifeng, real estate expert: Real estate regulation was key in 2010

The Chinese Academy of Social Sciences said that 2010 would be a "regulation year" for China's real estate industry. The practice of "property hoarding" by real estate developers was a main focus of legislators in 2010. Housing prices are predicted to fall by 15 percent in 2010, as opposed to the massive increases seen in 2009. However, Xie Yifeng stated that if housing prices continue to soar, new regulations and policies will be introduced in 2011.

Zhang Zhaoxin, associate research fellow at the Research Center for Rural Economy under the Ministry of Agriculture: Increased grain production has allowed China's agricultural industry to stabilize

Statistics released by the State Statistics Bureau on December 3 showed that China's gross grain production reached about 550 million tons in 2010, an increase of 2.9 percent from last year.

Zhang Zhaoxin stated that the increase in grain production shows that China's agricultural industry has a strong and stable foundation. The industry's successes in 2010 can be attributed to both political and environmental factors; for example, the Chinese Government created several policies this year which allowed for increased grain production. In addition, northeast China saw a larger number of clear and sunny days than usual in the latter half of the year, further boosting the production of grain.

Zhang said that the increased grain production will allow China to stabilize the prices of its agricultural products. Affected by the fluctuation of international prices, the price of domestic agricultural products has increased recently. Speculation surrounding China's spate of natural disasters in 2010 also had a negative effect on prices. However, Zhang believes that the agricultural industry's bountiful grain harvest will allow prices to go back down again.

Xie Zhenhua, Vice Minister of the China National Development and Reform Commission: Emission reduction targets have already been reached

As the world's largest developing country, China now faces a new period of industrial and urban development. This new phase brings with it multiple challenges, including improving the livelihoods of China's citizens, protecting the environment, and tacking climate change.

According to Xie Zhenhua, these challenges were dealt with by the adoption of emission reduction policies outlined in China's 11th Five-Year Plan spanning from 2006 to 2010. The policies featured in the plan call for the readjustment of China's industrial infrastructure. The policies enhanced public awareness of the need to reduce emissions, as well as provided support systems to ensure that China's economy will remain stable as it phases out some of its more environmentally damaging industries. Xie said that energy consumption per GDP unit for the first three quarters of 2010 was nearly 3 percent lower than the same period of the previous year. Xie believes that this is a sign that the country's energy-saving goals have already been realized, and the goal for dioxide emission reduction has reached ahead of time.

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