Top leaders meet to set economic guidelines for next year
By Wang Yanlin |
December 13, 2011, Tuesday
|
Print Edition
Print Edition
China's top leaders and economic planners gathered yesterday for the annual Central Economic Work Conference in Beijing, kicking off a meeting which will summarize China's economic performance this year and set guidelines for the year ahead.
This year's conference was being held much later than usual, an indication of the complexity of designing the road map on how to run China's economy in 2012.
Analysts expect no major shifts in policy stance from the three-day closed-door conference as leaders were stressing continuity. But "selective easing," which could strike a balance between a stabler economic growth, faster economic restructuring and more controllable inflation, was widely expected.
Next year is considered a crucial period in implementing China's 12th Five-Year Plan (2011-2015) with an emphasis more on the quality of growth. But a sharp economic moderation is definitely not what the policymakers expect to see.
Lu Zhengwei, chief economist at Industrial Bank, said inflation control was no longer the top priority for policymakers.
"Government officials should put growth in the first place now," Lu said yesterday. Lu expected a stable, gradual and selective easing policy stance that could help China cope with growing uncertainties in the world economy.
"In real implementation, plans usually can't catch up with changes, so planners should make their policies very flexible, targeted and forward-looking," Lu said.
As a prelude to yesterday's meeting, the Political Bureau of the Communist Party of China Central Committee issued a statement last Friday, saying China will maintain a prudent monetary policy and a proactive fiscal policy, while keeping an unswerving stance on control of the property market next year.
The statement was widely seen as setting the tone for the economic conference.
Economists had various interpretations of this tone, but many agreed that China adopted a pro-growth stance when inflation slowed to a 14-month low of 4.2 percent in November.
Qu Hongbin, HSBC's chief economist in China, said the word "prudent" can have an elastic meaning, and he expected China to reduce banks' reserve requirement ratio three times next year, together with one cut in interest rates.
China has already started to ease policies in the face of a rapidly moderating economy. On December 5, commercial banks were allowed to put aside less capital as reserves, unlocking about 400 billion yuan (US$63.4 billion).
China's economic growth weakened to 9.1 percent in the third quarter, down from 9.5 percent in the second and 9.7 percent in the first.
UBS AG expected China's economy to expand 8 percent in 2012, a sharp moderation because of the worsening European debt crisis. It was among a number of institutions which cut their projections for China's economic growth next year.
This year's conference was being held much later than usual, an indication of the complexity of designing the road map on how to run China's economy in 2012.
Analysts expect no major shifts in policy stance from the three-day closed-door conference as leaders were stressing continuity. But "selective easing," which could strike a balance between a stabler economic growth, faster economic restructuring and more controllable inflation, was widely expected.
Next year is considered a crucial period in implementing China's 12th Five-Year Plan (2011-2015) with an emphasis more on the quality of growth. But a sharp economic moderation is definitely not what the policymakers expect to see.
Lu Zhengwei, chief economist at Industrial Bank, said inflation control was no longer the top priority for policymakers.
"Government officials should put growth in the first place now," Lu said yesterday. Lu expected a stable, gradual and selective easing policy stance that could help China cope with growing uncertainties in the world economy.
"In real implementation, plans usually can't catch up with changes, so planners should make their policies very flexible, targeted and forward-looking," Lu said.
As a prelude to yesterday's meeting, the Political Bureau of the Communist Party of China Central Committee issued a statement last Friday, saying China will maintain a prudent monetary policy and a proactive fiscal policy, while keeping an unswerving stance on control of the property market next year.
The statement was widely seen as setting the tone for the economic conference.
Economists had various interpretations of this tone, but many agreed that China adopted a pro-growth stance when inflation slowed to a 14-month low of 4.2 percent in November.
Qu Hongbin, HSBC's chief economist in China, said the word "prudent" can have an elastic meaning, and he expected China to reduce banks' reserve requirement ratio three times next year, together with one cut in interest rates.
China has already started to ease policies in the face of a rapidly moderating economy. On December 5, commercial banks were allowed to put aside less capital as reserves, unlocking about 400 billion yuan (US$63.4 billion).
China's economic growth weakened to 9.1 percent in the third quarter, down from 9.5 percent in the second and 9.7 percent in the first.
UBS AG expected China's economy to expand 8 percent in 2012, a sharp moderation because of the worsening European debt crisis. It was among a number of institutions which cut their projections for China's economic growth next year.
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