China makes tremendous progress in poverty reduction since reform, opening-up

ROME, Oct. 28 (Chinese media) -- China has made tremendous progress in poverty alleviation since the country adopted its policy of reform and opening-up in 1978, according to a senior economist at the Food and Agriculture Organization of the United Nations (FAO).

Fang Cheng, speaking in a recent interview with Chinese media at the headquarters of the FAO, said that in the past 30 years there has been a substantial reduction in the number of China's rural poor population.

The number of people living on one U.S. dollar a day decreased from 490 million in 1979 to about 90 million in 2002 in China's rural areas, Fang said.

The country's poverty alleviation made giant strides especially in the period from 1978 to 1984, during which the population living in poverty decreased by about 300 million.

Therefore, it is fair to say that China has made the biggest contribution to the world's poverty reduction drive, said the FAO expert.

Fang attributed the great achievements to the sustained economic growth in China and a series of development policies for poverty alleviation by the government.

The remarkable progress in poverty relief by China was a result of successful agricultural reform, which promoted family-based land contract management and increased the State purchasing price of grain, oil crops and pork, said Fang.

Thanks to the reform policies, the country's agricultural output and income also improved considerably. The per capita income in rural areas increased by 90 percent during the period from 1980 to 1985.

Science and technology progress and increased investment in public undertakings in rural areas are two of the main driving forces behind China's agricultural development, said the expert.

The advancement of science and technology has significantly boosted the per unit output of grain, promoting corresponding investment in education and infrastructure in rural areas.

Statistics showed that the per unit output of corn, rice and wheat in China rose by 113 percent, 72 percent and 204 percent respectively during the period from 1977 to 2006.

Meanwhile, the figure was only 62 percent, 59 percent and 67 percent worldwide during the same period.

The FAO expert also praised China for its important role in keeping food prices stable on the world market.

China, which has long held a policy of remaining self-sufficient in grain production, has become a major factor in stabilizing the global grain price, he said.

The total output of grain in China reached 434 million tons in 2006, up 95 percent from 222 million tons in 1977, said Fang, citing a report by the FAO.

Meanwhile, the world's total output of grain grew from 1.123 billion tons to 1.935 billion tons during the same period, an increase of 72 percent, according to the report.

As the most populous country in the world, China has successfully fed a population making up about 20 percent of the world's total. The country's significance for the world's grain security is self-evident, Fang added.

The past year has witnessed a soaring global grain price due to oil price hikes and bad climate conditions.

The price of wheat, rice and corn grew by 40 percent, 48 percent and 80 percent respectively during the period from July 2007 to July 2008.

China, however, witnessed relatively stable grain prices which registered an increase of only a little more than 10 percent during the period, thus playing a positive role in promoting the recovery of the world market, he said.

The expert added that China is still facing many challenges in its fight against hunger and poverty despite all the achievements it has made, including shrinking farmland, climate change, increased grain demand and unbalanced regional development.

Closer Russia-China ties help both countries amid financial crisis

Special Report:Global Financial

Crisis

Special Report: Premier Wen visits Russia, Kazakhstan, attends SCO

meeting

MOSCOW, Oct. 27 (Chinese media) -- Russia and China should

make all possible efforts to boost bilateral economic cooperation to counter the

negative impact of the current global financial crisis on the two economies, a

Russian expert said in an interview with Chinese media.

"Closer cooperation between Russia and China will

prevent the ongoing financial crisis from inflicting bad influence on the real

economy of the two countries," said Andrew Ostrovsky, deputy chief of the Far

East Institute of the Russian Academy of Science.

"If the two economies continue to grow at a high

speed, bilateral trade will definitely keep increasing," Ostrovsky said, noting

that bilateral trade has grown rapidly in recent years.

Meanwhile, Ostrovsky said Russia and China should

strengthen cooperation in the field of energy.

"Almost all of Russia's pipelines now extend to the

West, but the fastest growing economies are in the Asia-Pacific region,

especially China... They all have great demand for energy and Russia should

partner with them in this aspect," he said.

In his view, Northeast China, which is an old

industrial base, have broad cooperation prospects with the Russian regions of

Siberia and Far East.

The Russian expert also suggested the two countries

consider using the Chinese yuan or the Russian ruble as a settlement currency in

bilateral trade. This is what already has been going on in border trade between

the two countries and has proved to be mutually beneficial, he said.

Under current conditions, when the Chinese yuan is

rising against the U.S. dollar, the use of the dollar as a settlement currency

would cause losses to both sides, he said.

He thus called on the governments and banks of Russia

and Chinato enhance cooperation and enact relevant policies as early as

possible.

China improving macroeconomic control capabilities upon impact from global financial crisis

Special Report:Global Financial Crisis

BEIJING, Oct. 24 (Chinese media) -- Premier Wen Jiabao predicted early in 2008 the year would be the most difficult one for the Chinese economy. Now, the year is approaching its end, but with seemingly more challenges and difficulties yet to be overcome in the world's fourth largest economy.

The current financial tsunami originating on Wall Street has swept the world at large and bitten into the Chinese economy, albeit the foundation of the economy hasn't changed.

According to the latest data, China's GDP growth slowed to 9.9 percent in the first three quarters, declining 2.3 percentage points from the same period of last year and falling to a single digit for the first time over the past five years. Foreign trade, a major driving force of the national economy, had its contribution to the GDP reduced 8.9 percentage points year-on-yearto 12.5 percent.

Given the escalated financial crisis, Wen has since the end of September stressed on different occasions that China would adopt flexible and prudent macro-control policies to combat the ensuing unprecedented challenges, striving for the stability of the country's financial sector, capital markets and economy at large.

On Wednesday, Vice Premier Wang Qishan reiterated the pledge at the 5th China-ASEAN (Association of Southeast Asian Nations) business and investment summit in Nanning, capital of the southwest Guangxi Zhuang Autonomous Region. He noted China had "confidence, conditions and capabilities to overcome any difficulty or challenge."

According to economists, the principle of flexibility for the macro control refers to that under increasing uncertainties and instability, actions should be taken timely and appropriately against the changing situation. The principle of prudence indicated policy shifts and adjustments should be made gradually, not in an unduly fast and in a reckless fashion.

They believed the "confidence, conditions and capabilities" were deeply rooted not only in the massive economy China had built up during the past three decades and huge fiscal revenues it accumulated over the recent five years, but also in the government's improving abilities to exercise macro-economic control.

China had undergone several major economic ups and downs since starting its reform 30 years ago. Each was triggered by overheating, partly resulting from decentralization, or pricing policy shifts or foreign exchange system reform.

Among the ensuing macro controls, the one in the 1984-1986 period was given up halfway; the one in the 1989-1990 period caused a hard landing. The macro-control drive in the 1993-1996 period ended with relatively serious deflation, because no timely turnaround was achieved for the then tight monetary policy.

China has accumulated rich experience and drawn enough lessons during the process of overcoming a hard landing. It has shifted from the previous reckless regulation approaches to fine tuning, step-by-step actions and flexible and comprehensive use of multiple methods.

Macro-control measures now include such economic instruments as price adjustment, taxation and credit extension, and legal and administrative means, instead of the mandates and central planning in the past.

The current round of macro control was initiated against high risks of economic overheating in the past few years. However, it was challenged this year by coincidence of an increasing number of uncertainties abroad and some problems and contradictions at home. As a result, the national economy slowed along with the economic downturn worldwide.

GDP growth ebbed to 10.1 percent in the second quarter from the first quarter's 10.6 percent level, and went further down to 9 percent in the third quarter. Accordingly, the government changed the macro-control policy of preventing the economy from overheating and curbing inflation, which was adopted at the end of last year, to a principle of maintaining growth and taming inflation.

In September, the consumer price index (CPI), a major gauge of inflation, dropped to 4.6 percent against a 12-year high of 8.7 percent in February.

At the end of the month, broad money supply (corporate and individual deposits plus cash in circulation) increased 15.29 percent from the same period of last year. The rate was the lowest in the past three years. Growth in the narrow money (current deposits plus cash in circulation) supply slowed to 9.43 percent.

All these were partly results of the macro-control efforts in the past nine months or so, and at the same time, were signs for anew policy shift.

Observers believe the fact the government underscores the flexibility and prudence of economic regulation symbolizes its macro-control capabilities are improving gradually.

Macro-control efforts in recent weeks were flexible and timely. The central bank lowered interest rates twice within one month. First it cut the reserve-requirement ratio for smaller lenders to bail out struggling smaller businesses. Then it slashed the ratio for all commercial banks.

Consumption boosts included an exemption of tax on earnings from individual deposits interest and a decision to double farmers' income by 2020. Exporters, particularly those dealing with textiles, garments and toys as well as some high-tech and high-added-value commodities, would be financially supported with higher tax rebates. The real estate market has been stimulated by tax cuts for house trading. All these tax breaks pointed to further fiscal measures.

According to Zhang Liqun of the macro-economic department of the Development Research Center of the State Council, the country's Cabinet, the principle of prudence was based on the fact China still boasted huge development potential and excessive liquidity, prone to overheating in investment. This basic situation remained unchanged. It was imperative for the country to avoid an extreme slowdown, and at the same time, prevent unduly loose policies. Otherwise, the effect of the macro-control efforts over the past five years might all come to naught, Zhang warned.

The complex and grim environment abroad and at home is a challenge faced by China, but can also translate into an opportunity for the country to upgrade its development pattern. Now the Chinese economy has entered an important period of adjustment.

The country has learned from experience over the past three decades that every major economic adjustment was followed by industrial restructuring, technological innovation and institutional reform, which drove the nation into a new era of economic growth.

Singapore PM highly comments on China's achievements in past decades

By Zheng Xiaoyi, Zhang Yongxing

SINGAPORE, Oct. 22 (Chinese media) -- Singaporean Prime Minister Lee Hsien Loong has highly commented on China's great achievements since the country adopted the policy of reform and opening up 30 years ago, saying the world's most populous country can play a more constructive and positive role on the international arena.

In an interview with Chinese media before his official visit to China starting on Wednesday, Lee described the transformation China has gone through since 1978 as "enormous".

"This is an enormous achievement, not just in terms of economic growth, but the change of mindsets, the awareness of what is happening in the world and the dynamism of wanting to move forward," he said.

Lee, who has visited China several times since taking office in2004, said that the physical transformation of both urban and rural areas in country as well as the high-quality infrastructure in the country were impressive.

"I think there has not been anything like this in the world before," he said, adding "What is the most impressive is the way the Chinese people have mobilized, and at every level in every city, in every province, you have leaders and people who are anxious to get ahead, who are participating in this transformation, who are thinking of new ideas to overcome their problems and move forward."

As for China's goal of pursuing a sustainable development, Lee said that "China's own population will increasingly want to make progress because standards of living are going up and the Chinese people want not just higher incomes but a balanced sustainable development."

Lee added that China's peaceful development will benefit both Asia and the rest of the world.

"Thirty years ago, China was a country with which we had historical links but only minimal economic ties. But now it is playing an active and major role in the region and we have very substantial economic relationship with it," Lee said.

During Lee's stay in Beijing on Oct. 22-27, the two countries will ink a comprehensive bilateral free trade agreement (FTA), the first such deal an ASEAN country is to sign with China.

"This FTA is not just of bilateral significance, it also has broader implications," Lee said, adding that "For China, it is a signal that despite the difficulties in the Doha Round, China still wishes to push forward with promoting trade and openness with its partners."

According to the prime minister, the FTA is also a signal to encourage other ASEAN members and the regional bloc as a whole to pursue and complete the FTA with China.

Lee said that China's success and confidence are benefiting countries in Asia.

Lee expressed the belief that China can play an important role in international issues.

Lee said that China needs to play a constructive and positive role in issues such as the Doha Trade Round, the U.N. Framework Convention on Climate Change (UNFCCC) discussions as well as the nuclear issue of the Korean Peninsula.

Lee believed that the 7th Asia-Europe Meeting (ASEM), to be held in Beijing on Oct. 24-25, would help achieve more consensus, promote exchanges and cooperation between the two continents which face some common challenges.

"The financial turmoil is, of course, one major item which willcertainly be discussed. Countries are taking action on the financial problems individually, but there is also a need for coordination to know what others are doing, to understand each other's thinking and to make sure that what each country does doesn't make the problems more complicated for other countries," he said.

Describing the turmoil as one of the most serious crises of thefinancial systems in many decades, at least since the Second World War, Lee noted the impact is not only on the financial sector, but is also on the real economies.

"The best thing we can do is to keep our economies moving, to increase investment in our countries where it makes sense and to increase gradually the proportion of consumption in our countries," he stressed.

He believed that Asian countries can withstand the slowdown in the end.

Lee said that Singapore has taken measures and will take more, if necessary, to help households, particularly low-income groups, to tide over this difficult period.

He urged ASEM leaders to promote resumption of Doha round trade talks, saying that in times of stress, there is great political pressure for governments to adopt protective measures.

The Doha Round talks, which aim to lower trade barriers worldwide and boost global trade, have stalled due to disagreements on issues such as agricultural and industrial tariffs.

The Singapore prime minister, who will take over the post of chairman the Asia Pacific Economic Cooperation (APEC) next January, pledged that his country would push for resumption of the Doha Round at next year's summit in November.

In regard to the modes of cooperation between Asia and Europe, Lee said that given the diversification of the two continents, it is not practical to have all of Europe and all of Asia working together on one big project.

"But pushing for many linkages between some countries in Asia and some countries in Europe, or in the European case, with the EU as a whole, that's possible and that is what we should do," he said.

Quarantine ends after two bird flu cases reported in central China

CHANGSHA, Jan. 27 (Chinese media) -- Health authorities in central China's Hunan Province have ended a week-long quarantine for 157 people who had close contacts with two confirmed bird flu cases --one of whom died.

Some 126 people in Changsha County were quarantined after a two-year-old girl was diagnosed of avian flu on Jan. 17; and another 31 in Huaihua County were quarantined after a 16-year-old boy died of the same disease on Jan. 20.

"None of them had any flu-like symptoms during the period, so the health department decided to end quarantine as of 0 a.m. Tuesday," said Liu Ke, a spokesman with the Hunan Provincial Health Department.

Those under quarantine included family members and relatives of the patients, medical workers who treated them and drivers who assisted their travels, he said.

A two-year-old girl, surnamed Peng, fell ill in Changsha County on Jan. 7. Undiagnosed, she was taken to the northern Shanxi Province by her grandparents on Jan. 11. Peng was confirmed to be infected with avian flu on Jan. 17 at a hospital in Taiyuan.

Health authorities in Shanxi said last week Peng was "out of danger" and her vital signs were stable.

China has reported five human deaths from the H5N1 virus this year. In the latest case, an 18-year-old man surnamed Liang died Monday in the southern Guangxi Zhuang Autonomous Region. He was ill since Jan. 19.

The other four deaths included a 19-year-old woman in Beijing on Jan. 5, a 27-year-old woman in Shandong on Jan. 17, a 16-year-old boy in Hunan on Jan. 20, and a 31-year-old woman in Xinjiang on Jan. 23.