ABSTRACT

The growth rates in July and August were also around 7%, which created certain difficulties in China’s efforts to meet the 1998 growth target. From January to July 1998, the total national industrial value-added production increased by 7.8% on a comparable basis, but the rate of increase was down 3.2% from the same period of the previous year. The major financial measure was the abolition of the quota system for fixed asset investment loans made by national commercial banks. In the current economic stimulation process, in order to guarantee meeting the macroeconomic target, the government increased investment. The major focus of investment to increase domestic demand was in infrastructure projects and public services. The effect of the fiscal policy should be directed to the entire national economy and not just to the public sectors.