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Wen says inflation curbing top priority despite global slowdown
By Feng Jianmin |
September 1, 2011, Thursday
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Online Edition
Online Edition
CHINA must step up measures to control inflation and especially home prices in smaller cities in the second half, Premier Wen Jiabao wrote in an essay.
"We must try our best to bring about a bigger drop in inflation in the second-half of this year and lay a foundation for price controls for next year," Wen wrote in an article published by the official Qiushi Magazine today.
Wen said that curbing prices was still a priority even though the global economy was fragile and sovereign debt problems in the United States and Europe were set to put a "drag" on world economic growth in the future.
China's inflation ran at 5.4 percent in the first half of the year and 6.5 percent in July, far exceeding the government's full-year inflation target of 4 percent.
Meanwhile, China's industrial expansion lingered at the slowest pace in 29 months. The official Purchasing Managers' Index, a comprehensive gauge of manufacturing activities across the country, rebounded slightly to 50.9 percent in August from a 29-month low of 50.7 percent in June, the China Federation of Logistics and Purchasing said today.
"Imported inflation is expected to remain elevated and the slowdown meets the expectations of the Chinese government," Wen said. "China should not change its macro economic policies at this stage."
In the article, Wen pointed out that controlling measures on China's property market were at a critical stage and the nation needed to focus efforts on curbing housing price gains in second and third-tier cities.
"We must unswervingly curb irrational housing demand, continue to strictly implement differential housing loans, tax policies and restriction on purchases," Wen said.
China has expanded its property control measures this year, raising down-payment requirements and mortgage rates to ease gains in home prices. The government said last month it would rein in residential prices in smaller cities.
Smaller cities, which have seen excessive price gains, should restrict the number of homes each family is allowed to buy, according to the State Council.
Home prices in the country remained "basically unchanged" in August from the previous month, SouFun Holdings said in an emailed statement today. Residential prices in 56 cities rose from July with average home prices nationwide climbing to 8,880 yuan (US$1,392) per square meter, according to the survey based on 100 locations tracked by SouFun.
"We must try our best to bring about a bigger drop in inflation in the second-half of this year and lay a foundation for price controls for next year," Wen wrote in an article published by the official Qiushi Magazine today.
Wen said that curbing prices was still a priority even though the global economy was fragile and sovereign debt problems in the United States and Europe were set to put a "drag" on world economic growth in the future.
China's inflation ran at 5.4 percent in the first half of the year and 6.5 percent in July, far exceeding the government's full-year inflation target of 4 percent.
Meanwhile, China's industrial expansion lingered at the slowest pace in 29 months. The official Purchasing Managers' Index, a comprehensive gauge of manufacturing activities across the country, rebounded slightly to 50.9 percent in August from a 29-month low of 50.7 percent in June, the China Federation of Logistics and Purchasing said today.
"Imported inflation is expected to remain elevated and the slowdown meets the expectations of the Chinese government," Wen said. "China should not change its macro economic policies at this stage."
In the article, Wen pointed out that controlling measures on China's property market were at a critical stage and the nation needed to focus efforts on curbing housing price gains in second and third-tier cities.
"We must unswervingly curb irrational housing demand, continue to strictly implement differential housing loans, tax policies and restriction on purchases," Wen said.
China has expanded its property control measures this year, raising down-payment requirements and mortgage rates to ease gains in home prices. The government said last month it would rein in residential prices in smaller cities.
Smaller cities, which have seen excessive price gains, should restrict the number of homes each family is allowed to buy, according to the State Council.
Home prices in the country remained "basically unchanged" in August from the previous month, SouFun Holdings said in an emailed statement today. Residential prices in 56 cities rose from July with average home prices nationwide climbing to 8,880 yuan (US$1,392) per square meter, according to the survey based on 100 locations tracked by SouFun.
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