Target for high rise in retail sales
By Leo Zhang |
January 29, 2010, Friday
|
Print Edition
Print Edition
CHINA plans to adjust some of its stimulus policies this year and targets a higher growth in retail sales as part of efforts to sustain a healthy economic recovery, a vice commerce minister said yesterday.
The country also faces mounting pressure from overseas to allow the yuan to appreciate and may face more trade barriers, Zhong Shan said in a statement on the Website of the Ministry of Commerce.
"The influence of the financial crisis is not over while the global economic recovery won't be smooth," Zhong said. "We should be well aware of the difficulties and improve both import and export structures."
He said the government expects retail sales to jump 16 percent this year, compared with a 15.5 percent expansion in 2009.
China's gross domestic product soared 10.7 percent in the fourth quarter of 2009 from a year earlier, the fastest pace since 2007. That helped propel its economy to expand 8.7 percent last year, above the target of 8 percent.
The economic growth was driven by a 4 trillion yuan (US$590 billion) stimulus package, various subsidies and measures to bolster domestic consumption and a record 9.6 trillion yuan in new loans extended last year.
China's consumer prices rose to a 13-month high of 1.9 percent in December, when exports rose for the first time in 14 months, helping the country overtake Germany as the world's biggest exporter.
Mounting inflationary pressures have already resulted in prompt government actions. The People's Bank of China early this month raised banks' reserve requirement by 50 basis points, the first such hike since December 2008. The central bank also guided bill yields higher, asked smaller lenders to set aside more reserves and offered window guidance to selected banks to cool their loan growth.
"China's exit strategy will initially focus on quantitative measures such as loan quota and reserve requirement to stabilize both asset and consumer goods prices," said Ting Lu, an economist with Bank of America-Merrill Lynch.
"They will be followed by administrative measures to cancel some projects to both cool the economy and to reduce excess capacities," Lu said.
Most observers believed risks of property bubbles and consumer price inflation may fade in mid-2010, when China will move to allow the yuan to rise and raise interest rates.
The country also faces mounting pressure from overseas to allow the yuan to appreciate and may face more trade barriers, Zhong Shan said in a statement on the Website of the Ministry of Commerce.
"The influence of the financial crisis is not over while the global economic recovery won't be smooth," Zhong said. "We should be well aware of the difficulties and improve both import and export structures."
He said the government expects retail sales to jump 16 percent this year, compared with a 15.5 percent expansion in 2009.
China's gross domestic product soared 10.7 percent in the fourth quarter of 2009 from a year earlier, the fastest pace since 2007. That helped propel its economy to expand 8.7 percent last year, above the target of 8 percent.
The economic growth was driven by a 4 trillion yuan (US$590 billion) stimulus package, various subsidies and measures to bolster domestic consumption and a record 9.6 trillion yuan in new loans extended last year.
China's consumer prices rose to a 13-month high of 1.9 percent in December, when exports rose for the first time in 14 months, helping the country overtake Germany as the world's biggest exporter.
Mounting inflationary pressures have already resulted in prompt government actions. The People's Bank of China early this month raised banks' reserve requirement by 50 basis points, the first such hike since December 2008. The central bank also guided bill yields higher, asked smaller lenders to set aside more reserves and offered window guidance to selected banks to cool their loan growth.
"China's exit strategy will initially focus on quantitative measures such as loan quota and reserve requirement to stabilize both asset and consumer goods prices," said Ting Lu, an economist with Bank of America-Merrill Lynch.
"They will be followed by administrative measures to cancel some projects to both cool the economy and to reduce excess capacities," Lu said.
Most observers believed risks of property bubbles and consumer price inflation may fade in mid-2010, when China will move to allow the yuan to rise and raise interest rates.
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