Austerity Policies cAlled for in Preventing economic overheAting

吕 政

With the implementation of the “National Economy and Social Development project” during the 10th Five-Year Plan since 2001, Chinas economic development has entered a new stage of development characterized by expanding fixed asset investment, growing industrial import/export trade,and maintaining relative price stability. With rapid industrial growth, however, came excess fixed asset investment expansion, excess demand for energy and raw materials, excessive arable land occupancy, and a worsening of environmental pollution. To prevent any potential economic overheating and structural dislocation, the CPC Central Committee and the State Council decided in 2003 to strengthen macro-economic control, transforming economic growth in accordance with the “scienti.c outlook on development”. This new macro-tightening policy not only helped in sustaining rapid industrial development and strong economic growth, but also created a better macro-economic environment.