Law makers, advisers to focus on inflation
3/3/2008 15:51
Inflation remains a primary challenge that China faces this year, and it
will be a focus topic for the national law makers and political advisers
gathering in Beijing for their annual full sessions this week.
The
advisers and law makers said an unwavering tight monetary policy should help the
country maintain steady growth.
China was confronted with more domestic
economic challenges as soon as 2008 began while the world economy continued to
slow down as the impact of the US subprime crisis rippled.
Having been
troubled by a rising consumer price index (CPI) since mid-2007, the country was
hit in January by the worst snow havoc in 50 years, causing a loss of at least
111.1 billion yuan (US$15.43 billion).
The CPI, the main gauge of
inflation, retouched an 11-year monthly high with a 7.1-percent rise in January.
Huge increases in food prices had pushed up CPI by 4.8 percent in 2007, also the
highest annual level since 1997.
Volatile international financial markets
and spiraling energy and food prices also pose challenges, said noted economist
Li Yining, a member of the National Committee of the Chinese People's Political
Consultative Conference, China's top political advisery body.
However,
Justin Yifu Lin, a deputy to the National People's Congress and the World Bank's
senior vice president, noted the US subprime crisis will have limited impact on
China.
"The demand by the US, China's second-largest trading partner,
will not decrease by a large margin as most of the Chinese exports to it are
low- and middle-end," Lin said.
His view was shared by Li, who predicted
China's GDP growth could still hit around 10 percent this year. Li said he
expected a stable CPI in the second quarter and a slight drop in the third and
fourth quarters.
A recent online survey by Xinhuanet.com indicated that
possible price hikes are the "topic of most concern" for Chinese
Netizens.
Song Guoqing, a professor at the China Economic Research Center
under Beijing University, said he believed the tight monetary policy and the
government's determination to curb inflation was crucial to ease public concerns
about inflation.
"Even worse than the inflation itself is the
anticipation of further price hikes by the public," he said.
The People's
Bank of China will keep its tight monetary policy unchanged to rein-in growing
inflation, said its vice governor Yi Gang. The central bank had taken a series
of measures, including raising the reserve requirement ratio 11 times and the
benchmark interest rates six times since last year, to absorb excess liquidity
and slow down inflation growth.
Political advisers and law makers have
urged the government to protect low-income earners.
"To provide
low-income people a protective umbrella should be at the top of the government's
agenda," said Jia Kang, a CPPCC member and director of the Research Institute
for Fiscal Science under the Ministry of Finance.
The CPPCC and the NPC
will convene their annual full sessions today and Wednesday
respectively.
Xinhua
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