New Year,New Direction

By Lan Xinzhen

The Central Economic Work Conference held on December 10-13 made plain that making progress while ensuring stability will be the focus for 2014， the first year to fully implement the guidelines of the Third Plenary Session of 18th CPC Central Committee.

For one， China should maintain consistency when formulating its economic policies by inheriting the principle of making progress while ensuring stability adopted in 2012. For another， the country should carry out economic reforms stably， give consideration to medium and longterm economic goals and enhance quality and efficiency of economic growth， said Jia Kang， Director of the Research Institute for Fiscal Science under the Ministry of Finance.

In 2014， downward pressures will persist， with other social and economic problems， such as overcapacity in some industries， structural unemployment， ecological environment deterioration， food and drug safety and public security.

At the same time， global economic recovery will remain fragile. New growth engines have not yet been discovered， and uncertainties still exist in the monetary policies of major powers， their investment and trade patterns， and commodity prices.

Against the odds， China will try to maintain stable economic expansion next year. This explains why the country will continue to follow a proactive fiscal policy and a prudent monetary policy.

Grain security

Unexpectedly， grain security tops the six major tasks put forward at the conference.

According to statistics from the National Bureau of Statistics， Chinas total grain output reached 601.94 million tons in 2013， up 2.1 percent year on year， marking an increase for 10 consecutive years. Moreover， China imports large quantities of grain from the rest of the world every year. In the eyes of many Chinese， food should not be a problem.

Li Guoxiang， a research fellow from the Rural Development Institute of the Chinese Academy of Social Sciences， noted that the priority given to grain security reflects the importance the Central Government attaches to the issue.

Even though China has witnessed continuous increases in its grain output， consumer demand has also grown every year. China still faces great pressure to maintain a consistent growth in grain output.

Obviously， the Central Government insists that Chinas grain security should be guaranteed by its own supply， and imports should only play a supplementary role. It was the first time that the concept of“moderate import” was put forward at the Central Economic Work Conference， which hinted that China would not rely entirely on grain imports.

Now， Chinas grain production still faces an array of challenges， such as high costs， narrowing room for output increases， extensive use of arable land and heavy dependence on imports of corn， rice and wheat.

To surmount these factors， China should transform its agricultural development pattern， strengthen the construction of agricultural infrastructure and advance agricultural scientific and technological progress.

Debt risk prevention

In recent years， a large number of local governments across the country have acquired debts due to blindly seeking GDP growth and pitching into vanity projects. At the Central Economic Work Conference， the government attached great importance to the prevention and control of the local government debt.

Jia suggested that since local government debt may affect the banking industry and government finance at all levels， the Central Government should pay special attention to the debt problem to strengthen their responsibility and risk awareness.

In the United States and Europe， debt problems have undermined social and economic development. Though China has a different political system and governance mode， the local government debt crisis， once it breaks out， will drag down the financial industry， which serves as the economic lifeline.

Before the conference， the State Council issued a statement rejecting GDP as the sole gauge for assessing the achievements of government officials.

The Central Economic Work Conference reiterated the importance of maintaining reasonable GDP growth， pushing forward eco-nomic restructuring， and ensuring both the quality and efficiency of economic growth without negative effects.

FTA talks

Another major task is opening China up to the outside world and furthering talks on free trade areas （FTAs） and investment agreements.

China may make breakthroughs in FTA negotiations， said Guan Qingyou， Assistant Dean of Minsheng Securities Research Institute.

At present， China is establishing 18 FTAs， involving 31 countries and regions. Of them， 12 free trade agreements have been signed， including agreements with Association of Southeast Asian Nations （ASEAN）， Singapore， Pakistan， New Zealand， Peru， Chile， Costa Rica， Iceland and Switzerland， closer economic partnership arrangements with Hong Kong and Macao， and Economic Cooperation Framework Agreement with Taiwan. All but free trade agreements with Iceland and Switzerland have come into force.

Another six free trade agreements under negotiation include ones with South Korea， Gulf Cooperation Council， Australia and Norway， as well as China-Japan-South Korea Free Trade Agreement and Regional Comprehensive Economic Partnership.

Guan believes negotiations for the ChinaSouth Korea free trade agreement are most likely to see progress in 2014. The bilateral talks started in 2012， and went through eight rounds this year. Now， the two countries have exchanged draft texts concerning other sectors， drawing closer to a conclusion.

China and the United States have finished 10 rounds of talks. Negotiations on a Sino-U.S. investment treaty will also be sped up.

In the next year， China is prepared to accelerate the opening up of its central and western regions， promote the Silk Road Economic Belt in central Asia and Maritime Silk Road of the 21st century among ASEAN members.

Guan noted that FTA talks were picking up steam across the world. By October， a total of 221 FTAs had been submitted to the World Trade Organization， most of which were finalized in recent years. As the trend of trade liberalization becomes increasingly overwhelming， China has been committed to building a global free trade network.

New urbanization

The central urbanization work conference was also held on December 12-13， where the concept of “human-centered urbanization” was proposed for the first time. In view of that， 2014 is regarded as the starting year of Chinas new urbanization.

Urbanization was stressed as one of the major economic tasks at the 2012 Central Economic Work Conference. This year， things have moved ahead. A special session was held for urbanization， indicating the Central Governments determination to push forward urbanization in a rapidly developing country with a population of 1.3 billion.

Wang Yong， an analyst from Citic Securities， noted that the Central Government intends to carry out urbanization more rationally by emphasizing development quality and benefits people can enjoy. Different from the blind pursuit of urban spatial expansion in the past， human-oriented urbanization is a timely adjustment.

Today， 52 percent of Chinese residents live in urban areas， but migrant populations from rural areas cannot enjoy the same public services as urban residents. In the process of new urbanization， more attention will be devoted to the will and demands of the rural population and ensuring equal access to urban public services. Wang said in the process of new urbanization， efforts will be made to help migrant rural population settle down in the cities.

Cities should develop characteristic industrial systems， intensify the specialized division of labor， promote industrial transfer， boost the service industry and strengthen innovation capacity.

While maintaining at least 1.8 billion mu （120 million hectares） of arable land， urban construction land should be efficiently used， ensuring that the space for production is used intensively and efficiently， that living space is livable and proper in size， and that ecological space is unspoiled and beautiful.

Three urban agglomerations have gradually taken shape in the Beijing-Tianjin-Hebei region， the Yangtze River Delta and the Pearl River Delta. In the future， some qualified areas in Chinas central， western and northeastern regions are expected to nurture more city agglomerations.

“There is a long way to go in promoting new urbanization. China must make a good start in 2014，” said Xu Shaoshi， Minister of the National Development and Reform Commission， at a national meeting on development and reform held on December 15.

Xu suggested that the new urbanization plan will be promulgated as soon as possible.