Prudent policy 'timely' on GDP growth
By Wang Yanlin |
December 7, 2010, Tuesday
|
Print Edition
Print Edition
IT will be difficult for China to expand its economy at a quick pace above 10 percent in coming years but a prudent monetary policy will help ensure a healthy growth, said Ba Shusong, vice director at the Development Research Center, a Cabinet think-tank.
Ba said China is standing at the threshold of a new economic cycle after the economic downturn in 2008 and 2009. But the country is unlikely to grow strongly similar to that in 2007 when its gross domestic product surged 11.9 percent, Ba said in an article published by the People's Daily yesterday.
The World Bank forecast China's economy may expand 9.5 percent this year and 8.5 percent next year while the country aims to grow at an average 8 percent in the coming five years.
"It is timely for China to shift from easy credit to a prudent monetary policy," Ba said. "The country may increase interest rates cautiously, and permit appropriate appreciation of the yuan under the new policy stance."
China last Friday announced it would adopt a prudent monetary policy, paving the way for it to tighten lending controls and raise interest rates.
China will also maintain its proactive fiscal policy, reflecting the government's wish to continue to encourage investment to sustain growth.
Ba predicted the change in policy will help China contain consumer price rise to 4 or 5 percent next year.
"The inflationary pressure remains high," Ba said. "But it can't reach the height of that in 2007 and 2008."
In April 2008, China's consumer prices rose 8.5 percent from a year earlier, and inflation topped 5.9 percent that year.
The Consumer Price Index raced to a 25-month high of 4.4 percent in October.
Ba said China is standing at the threshold of a new economic cycle after the economic downturn in 2008 and 2009. But the country is unlikely to grow strongly similar to that in 2007 when its gross domestic product surged 11.9 percent, Ba said in an article published by the People's Daily yesterday.
The World Bank forecast China's economy may expand 9.5 percent this year and 8.5 percent next year while the country aims to grow at an average 8 percent in the coming five years.
"It is timely for China to shift from easy credit to a prudent monetary policy," Ba said. "The country may increase interest rates cautiously, and permit appropriate appreciation of the yuan under the new policy stance."
China last Friday announced it would adopt a prudent monetary policy, paving the way for it to tighten lending controls and raise interest rates.
China will also maintain its proactive fiscal policy, reflecting the government's wish to continue to encourage investment to sustain growth.
Ba predicted the change in policy will help China contain consumer price rise to 4 or 5 percent next year.
"The inflationary pressure remains high," Ba said. "But it can't reach the height of that in 2007 and 2008."
In April 2008, China's consumer prices rose 8.5 percent from a year earlier, and inflation topped 5.9 percent that year.
The Consumer Price Index raced to a 25-month high of 4.4 percent in October.
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