New leadership stays on prudent economic course
By Wang Yanlin |
December 17, 2012, Monday
|
Print Edition
Print Edition
China will maintain a proactive fiscal policy and a prudent monetary policy stance next year to sustain an economic growth policy-makers hope to bolster with domestic demand, according to a statement issued yesterday at the end of a two-day Central Economic Work Conference in Beijing.
The expansion of domestic demand is a top priority in 2013, and to achieve it China will "improve structural tax reform, expand social financing, appropriately increase loans, and keep the yuan's exchange rate relatively stable." Restrictive property policies won't change, however.
The conference, which sets the tone for 2013's policies, offered the first glimpse of the economic thinking of the Communist Party of China's new leadership.
Shi Lei, an economics professor at Fudan University, said: "The new leadership is likely to keep policies stable and neutral when there are still many uncertainties ahead. The inflationary risks are fading but they don't disappear completely. A prudent monetary policy stance is helpful to strike the balance between growth and prices."
China has kept a proactive fiscal policy since late 2008 when the country rolled out a 4 trillion yuan (US$634 billion) stimulus package to combat the adverse impact of the global financial crisis. Monetary policy has not changed since 2010.
The Consumer Price Index, a main gauge of inflation, rebounded to 2 percent on an annual basis in November, up from October's 1.7 percent due to more expensive food. China's goal is to keep CPI growth to within 4 percent this year.
Ba Shusong, deputy director general at the State Council's development research center, said the statement reflected the top leaders' increased confidence.
"Shocks from external markets are decreasing, and domestic demand is picking up quickly thanks to more investment and consumption," Ba said.
China's gross domestic product expanded 7.4 percent from a year earlier in the third quarter, a three-year low due to weak exports and insufficient domestic demand. But economic performance has improved continuously since September.
China is to accelerate industrial restructuring while encourage innovation in products, brands, management and business models, the statement said, and will actively push forward urbanization to realize domestic consumption potential.
The country will also continue reform and opening up policies, enhancing the protection of foreign investors' rights and interests.
"China will try to stabilize the amount of inbound foreign direct investment, and expand outbound investment," the statement said. "The country will continue to support bilateral economic and trade cooperation, carry out a free trade zone strategy, and make more use of imports to promote industrial restructuring."
The expansion of domestic demand is a top priority in 2013, and to achieve it China will "improve structural tax reform, expand social financing, appropriately increase loans, and keep the yuan's exchange rate relatively stable." Restrictive property policies won't change, however.
The conference, which sets the tone for 2013's policies, offered the first glimpse of the economic thinking of the Communist Party of China's new leadership.
Shi Lei, an economics professor at Fudan University, said: "The new leadership is likely to keep policies stable and neutral when there are still many uncertainties ahead. The inflationary risks are fading but they don't disappear completely. A prudent monetary policy stance is helpful to strike the balance between growth and prices."
China has kept a proactive fiscal policy since late 2008 when the country rolled out a 4 trillion yuan (US$634 billion) stimulus package to combat the adverse impact of the global financial crisis. Monetary policy has not changed since 2010.
The Consumer Price Index, a main gauge of inflation, rebounded to 2 percent on an annual basis in November, up from October's 1.7 percent due to more expensive food. China's goal is to keep CPI growth to within 4 percent this year.
Ba Shusong, deputy director general at the State Council's development research center, said the statement reflected the top leaders' increased confidence.
"Shocks from external markets are decreasing, and domestic demand is picking up quickly thanks to more investment and consumption," Ba said.
China's gross domestic product expanded 7.4 percent from a year earlier in the third quarter, a three-year low due to weak exports and insufficient domestic demand. But economic performance has improved continuously since September.
China is to accelerate industrial restructuring while encourage innovation in products, brands, management and business models, the statement said, and will actively push forward urbanization to realize domestic consumption potential.
The country will also continue reform and opening up policies, enhancing the protection of foreign investors' rights and interests.
"China will try to stabilize the amount of inbound foreign direct investment, and expand outbound investment," the statement said. "The country will continue to support bilateral economic and trade cooperation, carry out a free trade zone strategy, and make more use of imports to promote industrial restructuring."
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