Macro controls to ensure stability

By Xin Zhiming (China Daily)
Updated: 2007-11-28 07:01

President Hu Jintao (L) and Premier Wen Jiabao (R) share a light moment with a member of the presidium of the fifth session of the 10th National People's Congress in Beijing's Great Hall of the People in this March 4, 2007 photo. [newsphoto]

The nation will continue to strengthen macroeconomic regulation next year to promote sound and rapid economic growth, a meeting of the Political Bureau of the Communist Party of China (CPC) Central Committee said Tuesday.

The meeting, presided by President Hu Jintao, said although the country has made headway in maintaining stable economic growth, problems exist.

The top priority next year will be to prevent relatively fast economic growth from overheating and stop structural price rises from evolving into entrenched inflation.

Gross domestic product (GDP) expanded by a blistering 11.5 percent in the first three quarters year on year.

The consumer price index grew by 6.5 percent in October, matching the decade's high in August. It is expected to reach 4.5 percent for this year, much higher than the benchmark of 3 percent set by the central bank earlier this year.

Top statistician Xie Fuzhan predicted the country's CPI will rise 4.5 percent to 4.6 percent this year, which will indicate a moderate and tolerable inflation, in a speech made at Tsinghua University last week.

Xie noticed that apart from rising food prices, global price rises for crude oil fuelled price rises for industrial products. Meanwhile, price rises for nonferrous metals and iron ores also contributed to the CPI increase.

He also warned that substantial price rises for real estate and equities would translate to higher risks on economic growth in the long term.

Measures will be taken to continue to strictly control excessive growth in fixed-asset investment and keep prices stable, the meeting said.

China will also focus more on the drive to save energy and cut pollutant emissions, Hu said at a recent meeting soliciting opinions on the current economic situation from non-Communist parties, industrial and commercial federations and people without party affiliation.

Premier Wen Jiabao made it clear last week that the country will strive to maintain stable prices and sound economic growth.

The remarks are seen as setting the tone for the upcoming high-level central economic conference, whose date has not been announced.

The conference "will pave the way for smooth implementation of central policies by local governments next year", Chen Gong, chairman and chief economist of Beijing-based Anbound Consulting, told China Daily.

It is quite likely that the central authorities will take harsher measures next year to curb fast-growing fixed-asset investment, he said.

Urban fixed-asset investment grew by 26.7 percent year on year during the January-October period, while real estate investment rose by 31.4 percent, up from 30.3 percent in the first nine months.

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