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Tackling inflation is high policy issue
By Wang Yanlin |
December 14, 2010, Tuesday
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Print Edition
Print Edition
CHINA has signaled that tackling inflation will be a high policy priority and may tolerate slower economic growth in 2011, analysts said yesterday as they compared the tone of the language used in the statement of an annual central meeting over the weekend with previous ones.
"While the statement uses vague language in general terms without specifying any particular economic and policy targets, it does send a signal," said Wang Qing, an economist at Morgan Stanley, as the three-day central economic work conference which set the tone for broad economic policy in 2011, concluded on Sunday.
To decipher potential policy shifts, Wang discovered subtle differences between this year's statement and the one last year after a thorough comparison of the language used.
For example, this year's statement said the world economy is expected to continue recovering but there still remains many uncertainties. It rings a more positive bell than a year ago and signals Chinese authorities are more confident about the world economy in 2011.
China will adopt a proactive fiscal policy and a prudent monetary policy, the statement said, and the focus will be to manage better the links between stable and relatively fast economic development, economic restructuring and inflation expectations. In last year's note, inflation was not mentioned and this year's statement reflected a high priority given to the issue, Wang said.
Morgan Stanley projected China's economy to expand 9 percent on an annual basis next year and the Consumer Price Index, the main gauge of inflation, will grow 4.5 percent year on year in 2011.
Sun Lijian, an economics professor at Fudan University, also said the statement indicated China's determination to fight inflation while accelerating its economic restructuring.
"While the statement uses vague language in general terms without specifying any particular economic and policy targets, it does send a signal," said Wang Qing, an economist at Morgan Stanley, as the three-day central economic work conference which set the tone for broad economic policy in 2011, concluded on Sunday.
To decipher potential policy shifts, Wang discovered subtle differences between this year's statement and the one last year after a thorough comparison of the language used.
For example, this year's statement said the world economy is expected to continue recovering but there still remains many uncertainties. It rings a more positive bell than a year ago and signals Chinese authorities are more confident about the world economy in 2011.
China will adopt a proactive fiscal policy and a prudent monetary policy, the statement said, and the focus will be to manage better the links between stable and relatively fast economic development, economic restructuring and inflation expectations. In last year's note, inflation was not mentioned and this year's statement reflected a high priority given to the issue, Wang said.
Morgan Stanley projected China's economy to expand 9 percent on an annual basis next year and the Consumer Price Index, the main gauge of inflation, will grow 4.5 percent year on year in 2011.
Sun Lijian, an economics professor at Fudan University, also said the statement indicated China's determination to fight inflation while accelerating its economic restructuring.
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