Experts’ Views on China Economy of 2011

director of Foreign Economic Research Institute of National development and Reform CommissionZhang Yansheng points out that， the statement of Central Economic Work Conference on RMB exchange rate means that next year China will insist on perfecting RMB exchange rate regime in accord with actual national conditions， and continue the reform direction towards enhancing regime flexibility and forming mechanism marketization. He believed that appreciation of RMB would not help to solve the “problem” of trade surplus of China， as China’s trade surplus is mainly from processing trade， internal trade of multinational companies， and is resulted from globalization. It can not be overcome by exchange rate regime.Researcher at decision-making Consultation department of Chinese Academy of GovernanceWang Xiaoguang said， in consideration of that the export and actual consumption may slowdown next year， but investment would continue to rise， China is possible to have 9% to 9.5% of GDP growth in 2011. According to the data issued by General Administration of Customs recently， in November 2010， China had an import and export value totaled 283.76 billion US dollars， up 36.2% from a year ago， refreshing the record of US$273.09 billion September 2010， and topping US$280 billion for the first time. Wang Xiaoguang pointed out that， as export grew too fast in 2010， even to a new height in November， it may slow down in 2011 due to this large basic value; on the other hand， global economy recovered as a whole in 2010， and may face adjustments in the following year. “In American and European markets we may face higher pressure， so it is estimated that 2011 will see an export growth of 10% plus or so， which could be a major restrictive factor for China economic growth.”president of China Human Resources development Research Association， researcher of Academy of Macroeconomic Research of National development and Reform CommissionLiu Fuyuan said， the key of economic structure adjustment is the transformation of peasant workers and making free of farmers. He pointed out that， if 1% of rural population can be turned into urban， China’s economy development will improve by one percentage， and GDP growth rate will not be less than 10%. Now the principal contradiction in China is the contradiction between urban and rural mode of production. Liu Fuyuan said， changing the social identity of peasant workersand accelerating urbanization of rural population， can solve many problems. He consistently claims that transformation of social identity of peasant workers should be an important topic during 12th Fiveyear Period. “Peasant workers should stay in cities. The major barrier for the transformation lies in lack of a social security system with comprehensive coverage. Moving rural population to towns instead of urbanization is not a good choice， and the best way is to perfect the social security system，” he said.from School of Public Policy and Management， Tsinghua UniversityProfessor Xiao Geng believed personal income tax threshold does not matter much， but it is important to lower the rates. Doing this can attract many industries to relocate in China Mainland from overseas， such as finance and other high-end service industries. In this way， the revenue would increase rather than decline. As to those new taxes like resources tax， environment tax and house tax， he said the government should be prudent. For example， the property and value of real estate in China is very complicated to figure out， so it must be cautious to set building tax rate. “These new taxes should have a low rate， if they are imposed，” he said.director of department of Macroeconomics， Institute of Economics， Chinese Academy of Social SciencesZhang Xiaojing said， the number of favorable factors to stimulate consumption increases in recent years. For example， farmers’ income， standards for minimum urban living allowance， minimum wage and personal income tax threshold are on the rise， the govern- ments’ input in people’s livelihood is increase， and the process of urbanization is speeding up. Since most people source their incomes from work， next phase of reform on income distribution system will take wage reform as the core and lift the proportion of labor income in initial distribution of income.Researcher Yi Xianrong from Institute of Finance and BankingYi Xianrong said， the key of reasonable property market regulation is to clean speculation. There are numerous policies， but they are not put into practice as expected. About 70% to 80% of property market regulation policies are not carried out as expected. “House tax which is hotrecently can do little help， and the key to regulate property market is to control speculative purchases. 10 million sets of welfare housing to be constructed in 2011 will ease the pressure on people with housing difficulties， having no major impacts on commodity property market.Asenior economist from Asian development Bank China OfficeZhuang Jian pointed out that， most of the governmental investments were used in infrastructure construction. In the 12th five-year period， central government will put more attention to people’s livelihood， to boost domestic demand and improve people’ lives; investments in emerging strategic industries will increase; meanwhile， the government also should spare investment to small and medium-sized and private enterprises， to develop various driving forces to boost economic development.