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CHINA> National
Controlling inflation remains top priority this year
(China Daily)
Updated: 2008-07-26 08:41

Party leaders on Friday named curbing inflation as the nation's economic priority for the remainder of this year, while also ensuring steady growth with macro-control measures.

The meeting of the Political Bureau of the Communist Party of China (CPC) Central Committee, presided over by Party General Secretary Hu Jintao, said China will strive to maintain stable and fast economic growth and carry on its battle against inflation.

The meeting also decided to convene the Third Plenary Session of the 17th CPC Central Committee in October in Beijing.

The meeting came after senior leaders completed inspection tours of export powerhouses in the nation's coastal provinces earlier this month.

"The meeting conveys an important message that concern about economic slowdown is picking up," Zhao Xijun, a finance professor at Renmin University of China, said. "The decision-makers are now also preparing precautionary measures for a drastic slide instead of just overheating at the beginning of the year."

China's economic growth has been slowing down for the past four quarters. The nation's gross domestic product growth fell to 10.1 percent year-on-year in the second quarter, compared with 11.9 percent a year ago.

Official statistics show export growth slowed to 17.6 percent year-on-year last month to $121.53 billion, compared with 28.1 percent in May.

According to the meeting, China will maintain the consistency of its macro-control policies. But it will increase flexibility in the second half and carefully decide the targets of macro-control measures.

"China will still face serious challenges in terms of inflation," Zhao said. "The surging producer price index (PPI) and the possible resurgence in food prices mean policymakers have to keep a close watch on the consumer price index (CPI)."

China's CPI fell to 7.1 percent last month, compared with May's 7.7 percent. But PPI, which measures factory-gate inflation, reached 8.8 percent last month, the fastest rise since 1999.

Zhao said it will take three to six months for manufacturers to pass on their cost pressures to consumers.

 

 

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