China faces "serious" price stability challenges as growth slows
24/12/2008 17:18
A senior Chinese Cabinet member said today China faces serious challenges
in stabilizing prices as economic growth slows amid international financial
turmoil.
"Generally speaking, the pressure of price surges has greatly eased
and problems caused by slumping prices of certain key commodities are becoming
outstanding," said Zhang Mao, vice minister of the National Development and
Reform Commission, delivering a Cabinet report to the top
legislature.
International price fluctuations and declining prices for
certain farm products, rising enterprise costs, employment difficulties and
problems with the pricing system of resource products were all contributing to
the difficulty of stabilizing prices, he said.
There has been a sharp
turnaround in consumer price pressure in the past few months. The National
Bureau of Statistics said on Dec. 11 that the consumer price index (CPI), the
main gauge of inflation, rose at a slowing annual rate of 2.4 percent in
November.
That was the seventh consecutive decline for the CPI, which was
driven down by plunging world commodity prices and sluggish demand as the global
financial crisis deepened.
Last year, the CPI rose 4.8 percent, the highest
rate since 1997 and well above the 3 percent target, mainly due to higher food
and housing costs.
The CPI rose 7.9 percent in the first half of this year
year-on-year with a 12-year-high of 8.7 percent in February.
However, Zhang
expressed confidence that China could withstand the challenges.
Based on the
situation in the first three quarters, China's overall economic position is
good, he told lawmakers. "China has the ability and power to withstand risks,
since it has a big domestic market and it still has much room for (economic)
adjustment and control."
Gross domestic product (GDP) growth slowed to 9.9
percent in the first three quarters, down 2.3 percentage points from the same
period last year and below 10 percent for the first time in five
years.
Xinhua
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