Inflation fight remains first, Wen says
Source: Xinhua/Shanghai Daily |
July 13, 2011, Wednesday
|
Print Edition
Print Edition
THE Chinese government will continue to put the fight against inflation at the top of its agenda by keeping a prudent monetary policy stance, but it will try to avoid any big swings in economic growth caused by excessive tightening, Premier Wen Jiabao said in comments published yesterday.
"We must avoid the combination of lagging effects of monetary policy and other factors to cause big impacts on future real economic operation," Wen said.
Wen made the comments at four meetings with government officials from eight of the country's provinces, as well as leading businessmen and economists in the past seven days.
"Stabilizing prices remains the top priority for our macro-regulatory policies," Wen said, noting that the policies should be amended to be more flexible and forward-looking.
"We must slow down inflation, but we must not allow big fluctuation in economic growth," Wen said.
He added that stabilizing the country's food supply and cutting logistics costs will help to tame inflation, as soaring food prices are the driving force behind rising prices.
China's annual inflation rate hit a three-year-high of 6.4 percent in June, and local government leaders, business executives and experts have told Wen that the Chinese economy faces increasing "dilemmas."
China will publish GDP growth for the second quarter today, with a slowdown expected from the first quarter's 9.7 percent.
Wen reiterated that the general direction of China's monetary policy will not change, but said China must fine-tune its policies when necessary.
"We must reasonably use various monetary policy tools to make our policies more targeted," Wen said.
Financial institutions should improve their credit structure and increase financial support for small businesses, he said.
Wen added that China will push forward liberalization of its exchange rate and interest rate regimes and enhance management of banks' off-balance sheet assets.
"We must avoid the combination of lagging effects of monetary policy and other factors to cause big impacts on future real economic operation," Wen said.
Wen made the comments at four meetings with government officials from eight of the country's provinces, as well as leading businessmen and economists in the past seven days.
"Stabilizing prices remains the top priority for our macro-regulatory policies," Wen said, noting that the policies should be amended to be more flexible and forward-looking.
"We must slow down inflation, but we must not allow big fluctuation in economic growth," Wen said.
He added that stabilizing the country's food supply and cutting logistics costs will help to tame inflation, as soaring food prices are the driving force behind rising prices.
China's annual inflation rate hit a three-year-high of 6.4 percent in June, and local government leaders, business executives and experts have told Wen that the Chinese economy faces increasing "dilemmas."
China will publish GDP growth for the second quarter today, with a slowdown expected from the first quarter's 9.7 percent.
Wen reiterated that the general direction of China's monetary policy will not change, but said China must fine-tune its policies when necessary.
"We must reasonably use various monetary policy tools to make our policies more targeted," Wen said.
Financial institutions should improve their credit structure and increase financial support for small businesses, he said.
Wen added that China will push forward liberalization of its exchange rate and interest rate regimes and enhance management of banks' off-balance sheet assets.
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