In 2009, the national economy generally witnessed a good recovery, with the GDP standing at RMB3.35t, up 8.7% year-on-year based on the calculation at comparable price, thus China has exceeded the full-year “growth target of 8%”.

Economy saw a steady recovery

In 2009, total investment in fixed assets rose by 30.1% from last year, with the growth speed 4.6 percentage points faster than last year, the industrial added value above designated size up 11.0% from last year, and the growth speed down 1.9 percentage points from last year. Among them, the industrial added value above designated size increased 5.1% in the first quarter, 9.1% in the second quarter, 12.4% in the third quarter, and 18.0% in the fourth quarter.

From January to November, the industrial enterprises above designated size realized the profits of RMB2.5891t, up 7.8% year-on-year, 2.9 percentage points faster than the same period of the previous year. Profits of 30 ones realized a year-on-year growth among 39 major industries.

PrimeCredit Securities Chief Economist Gao Shanwen predicted that in 2010, Chinese economy will maintain the momentum of recovery, with the economic growth expected to be roughly 9.8%, the growth speed of investment in urban fixed assets about 27%, consumption growth 16%, export growth 17% and the scale of favorable balance basically equivalent or a slight decline compared with that in 2009.

Investment in the people’s livelihood significantly rose

Investment in the people’s livelihood significantly rose, with investment in the infrastructures (exclusive of electricity) standing at RMB4.1913t, up 44.3%. Among them, investment saw an increase of 67.5% in the rail transport increased, 40.1% in the road transport and 59.7% in the urban public transport industry.

Investment in resident service and other service industries, education and health care, social security and social welfare rose 61.8%, 37.2% and 58.5% respectively.

Investment in real estate development amounted to RMB3.6232t, up 16.1%, with the growth speed down 4.8 percentage points from the previous year.

Retail sales of consumer goods across China totaled RMB12.5343t, up 15.5% from the previous year, actually up 16.9% and the actual growth speed up 2.1 percentage points from the same period last year after adjusting for inflation.

Automobile sales rose 32.3%, with the automobile industry being a black horse in the stock market of 2009.

Export recovery was cautiously optimistic

Total import and export throughout the year reached USD2.2073t, down 13.9% from last year. Total import and export in November rose 9.8% and 32.7% in December, with favorable balance of USD196.1b, down USD99.4b from last year.

Vice director of the Import and Export Institute under the Chinese Academy of International Trade and Economic Cooperation Li Jian pointed out to the magazine of Finance that from 2002 to 2008, Chinese foreign trade witnessed a seven-year high-speed growth, with the average annual growth speed of 26% and total import and export more than double. However, the problems of economic structure without optimization and extensive economic growth mode still stood out, simultaneously followed by a series of new contradictions dramatically expanded favorable balance, rapidly increasing trade frictions, disharmony with macro-economy and contracted resource and energy as well as environmental bearing capacity.

The international economic and trade pattern is confronting profound reshuffle, with insufficient overseas market demand, protectionism and other problems to affect the development of Chinese foreign trade for a long term, so the major challenge facing China is not whether it can recover growth but whether it can maintain sustained development or realize the coordination of domestic and overseas economy, the development of foreign trade and macro-economy and the development of foreign trade and resource environment.

8.7% is a remarkable figure gained by China in economic growth during the “toughest” year with economy impacted by the international financial crisis, and thus the target of “guarantee economic growth of 8%”, which was put forward at the beginning of 2009, was not only successfully realized but greatly exceeded anticipation.

The data issued by the National Bureau of Statistics (NBS) at the information office of the State Council on January 21 indicated that in 2009, Chinese economy rose 8.7% from last year. Among them, Chinese economy increased 6.2% in the first quarter, 7.9% in the second quarter, 9.1% in the third quarter and 10.7% in the fourth quarter.

"Supposing that depicting the year 2009 with a few words, we shall immediately hit on the word—harvest." Director of the NBS Ma Jiantang pointed out. In the face of the strong impact of the international financial crisis, the central government timely carried out the positive fiscal policy and the moderately loose monetary policy and decidedly released and constantly enriched and perfected a package of plans, and consequently turned around the obvious decline of economic growth quickly and took the lead in realizing the full recovery of economy.

Looking back to the toughest period of late 2008 and the beginning of 2009, when the world’s economy was deeply in recession, with nobody knowing where “bottom” was; Chinese economic growth drastically dropped to 6%, export saw a significant decline and thousands of migrant workers lost jobs and returned home.

Confidence is indeed more important than gold and currency. Confronting the severe situation, central leaders reiterated that confidence is more important than gold and currency. Now let’s review the sentence and find how correct and foresighted it is. If there is no confidence, economy will get from bad to worse. But if there is confidence and gradually released measures to fight the crisis, economy will be recovering.

Statistics indicated that in 2009, among the GDP of RMB35.3t, investment of RMB22.5t exerted the primarily driving role, with total retail sales of consumer goods of RMB12.5t being also the backbone while the net export still slowing down the economic growth.

Researcher with the Department of Macroeconomic Research of the Development Research Center under the State Council Zhang Liqun analyzed that the international financial crisis severely impacted Chinese export, and the “V”-shape reversion of Chinese economy in 2009 merely depended on domestic demand. China is presently still in the phase of industrialization and urbanization speeding up development, so it has a vast potential of development; the governmental macro-adjustment and control capability and level is on the rise, with fast response and rigid measures in the crisis, the combination of which successfully achieved the target of “guarantee economic growth of 8%” by expanding domestic demand.

Statistics indicated that in 2009, Chinese investment in fixed assets saw a year-on-year increase of 30.1%, with the growth speed up 4.6 percentage points from last year; total retail sales of consumer goods actually rose 16.9%, up 2.1 percentage points, with the automobile and real estate markets booming.

Driven by domestic demand, the growth of the industries above designated size rapidly rebounded to 18% in the four quarter from 5.1% in the first quarter of 2009. The enterprise economic benefit slightly rose from the significant decline, which renders the employment situation better than anticipation, with this year’s urban newly-added jobs of 9.10 million, consequently exceeding the anticipatory target.

The success of “guarantee economic growth of 8%” signifies that the course of Chinese rapid development does not quit just because of external impact, thus proving that the capability of Chinese economy in coping with various impacts has reached a new level. At present, China shall maintain relatively fast economic growth, which is of great significance to creating jobs, raising resident income and enhancing comprehensive national strength.

The central economy working conference set the tone for the development of Chinese economy in 2010: the next year’s economic growth will give priority to “promote the transformation of growth mode” while Chinese economy is steadily recovering.

The adjustment of the policy thinking with the economic growth changing from this year’s “guaranteeing economic growth” as the primary task to the next year’s “promoting transformation” as the growth priority showed China’s resolution of struggling for sustained development in coping with the financial crisis.

“The international financial crisis renders China’s transforming economic growth mode to be more prominent. International and domestic economic situation taken into account, time allows of no delay in transforming economic growth mode.” The central economy working conference highlighted that to carry out the next year’s economic work well shall organically combine maintaining economic stable and fast development and speeding up the transformation of economic growth mode, with transformation to promote in the growth and growth to seek for in the transformation.

The year 2010 is the last year during which China carries out the “Eleventh Five-Year” Plan, when China will continuously implement the positive fiscal policy and the moderately loose monetary policy, and at the same time, the conference also further released the signal to strengthen the policy fine-tuning.

The continuously shrinking external demand market imposes a severe ordeal for Chinese traditional export-oriented economy. In terms of the priority in the transformation of growth mode, the next year’s economic policy will focus on expanding domestic demand and guaranteeing the people’s livelihood.

“We shall take the improvement of the people’s livelihood and the development of social undertakings as the key point of expanding domestic demand and adjusting economic structure and unswervingly promote them in 2010.” Pursuant to the content of the conference, China will next year continue to increase investment in such areas of the people’s livelihood as “Three-Agriculture”, science and technology, education, health, social security and security housing.

To enhance the role of consumption in driving economic growth is the basis for the long-term development of Chinese economy while to expand consumption shall badly need to tackle some in-depth reforms. The conference stressed that the adjustment of the national income distribution shall be strengthened in a bid to enhance the consumption capacity of residents, especially the low-income people.

China will next steadfastly control the newly-increased projects of the industries with overcapacity, carry out low-carbon economy pilot projects and struggle to control greenhouse gas emission while fostering new economic growth points.

On the basis of speeding up the adjustment of economic structure, China will in 2010 deepen the economic reform, including boosting the transformation of governmental function, deepening resource price and the reform of the fiscal and taxation system, further optimizing the ownership structure, advancing the reform of the monopoly industries and enhancing the motivation and vitality of economic growth.

For the still severe situation of overseas market demand, Chinese government stated that it will next year continuously promote the stable growth of export and combine stabilizing overseas market demand and expanding domestic demand in a bid to enhance the balance of economic development through such measures as speeding up the transformation of foreign trade development mode, raising the quality of introducing foreign capital and encouraging more domestic enterprises to “go abroad”.