Barely three years after joining the World Trade Organisation, China has emerged as a major power, with total trade this year exceeding US$1 trillion, a rise of more than 30 per cent over last year. This makes it the world's third-largest trading power, an astonishing performance for a country that, a quarter of a century ago, was an insignificant player.

The economy as a whole is expected to have grown by 9.2 per cent by the end of the year, with the projection for next year about 8.5 per cent. The International Monetary Fund has predicted that average growth next year will drop to 4.3 per cent, from 5 per cent this year, but the Organisation for Economic Co-operation and Development has forecast that the Chinese economy will grow 8 per cent next year, a significantly higher rate. It said that China remained competitive due to its stable exchange rate, labour costs and the removal of textile quotas next year. The World Investment Report 2004 also said that China had become one of the two engines for growth of the world economy.

While aware of the need to avoid overheating the economy, China's leaders still want high-speed growth. Beijing has made it clear that it will seek to ensure comparatively fast economic development and stable prices through the use of macro-economic controls, such as those on loans and the use of land. Such measures were taken over the past 10 months to avoid excessive investment in overheated sectors such as iron and steel, and cement. Instead, investment is being diverted to agriculture, infrastructure and energy projects.

At an economic work conference in Beijing this month, China's leaders said that prudent fiscal policy and stable economic growth - with an emphasis on efficiency and preventing overheating - were the top goals for next year.

Foreign direct investment is expected to reach US$60 billion this year, exceeding the US$53.5 billion of last year, according to the World Investment Report 2004, released by the United Nations Conference on Trade and Development.

James Morris, executive director of the United Nations World Food Programme, said recently that the Chinese government had achieved remarkable results in moving its people out of poverty. The agency plans to phase out food assistance to China next year.

In the coming year, one focus of the government will again be agriculture, with the emphasis on both increasing production and raising farmers' income. Grain output this year is expected to reach 455 billion kilograms, reversing four years of falling yields. A farmer's income this year was put at 2,110 yuan (US$255) in the first three quarters, up 11.4 per cent year on year.

The Beijing conference set savings of energy and resources as important targets, to put an end to the current situation, which is characterised by high consumption, heavy pollution and low economic returns.

While the economy has soared in the last quarter of a century, it has also brought social problems in its wake. This includes high unemployment and internal migration as well as the ageing of the population. Currently, there are 130 million people aged 60 or above, accounting for about 10 per cent of the total population. And as families get smaller, it is becoming increasingly difficult to expect younger people to take care of their elderly parents and grandparents.

Moreover, more than 70 per cent of the country's rivers and lakes are polluted, with water rendered unsafe to drink. "Currently, 300 million Chinese people are drinking unsafe water, among which 190 million are drinking water with harmful substances above set standards," said Wang Shucheng, Minister of Water Resources, at a conference for directors of water resources bureaus. He said that the government hoped to ensure that all rural residents will have safe drinking water by 2020. 

Frank Ching is a Hong Kong-based journalist and commentator.