China leaders pledge stable economy

China’s leaders pledged to ensure “stable and healthy” economic development in 2011, state media said on Sunday in announcing the conclusion of a top-level annual meeting on the economy.

The Central Economic Work Conference, held each year to outline economic strategies for the coming 12 months, also resolved to manage inflation expectations in an “active and stable way”, the official news agency Xinhua said.

The three-day meeting of the powerful nine-member Communist Party Politburo Standing Committee — presided over by President Hu Jintao — also reaffirmed plans for a tighter monetary policy next year, the report said, citing a statement from the meeting.

The conference, also attended by Premier Wen Jiabao and other top leaders, resolved that economic policy next year would be “actively sound, prudent and flexible”.

The government had earlier this month said China would move from a “relatively loose” policy to a “prudent” one as inflation in the world’s second-largest economy has marched upward despite numerous measures to put the brakes on.

Analysts have said the shift was a sign that new interest rate hikes were imminent.

China would continue to maintain the yuan currency at a “reasonable and stable” level, while also continuing with plans to free up its exchange rate, the meeting statement said.

China faces mounting pressure from the United States amid accusations Beijing deliberately keeps the yuan significantly undervalued, thus making Chinese export more attractive on world markets.

China announced in June it would loosen its grip on the currency and the yuan has appreciated by about two percent against the dollar, but analysts say a significant revaluation was unlikely as Beijing fears that could trigger massive unemployment.

The committee also reiterated government pledges to ensure adequate supplies of agricultural goods and implement supporting policies for rural areas.

Inflation and economic stability have become key concerns in China.

The government said Saturday that inflation topped five percent in November for the first time in more than two years.

The country’s consumer price index rose a faster-than-expected 5.1 percent year-on-year in November as food costs continued to soar, compared with 4.4 percent in October, the National Bureau of Statistics (NBS) said.

It was the fastest increase in consumer prices since July 2008, when inflation hit 6.3 percent, and was well above the government’s full-year target for three percent.

Analysts had forecast inflation would be 4.7 percent on year, according to Dow Jones Newswires.

Ever fearful of inflation’s historical potential to spark unrest in China, Beijing has ordered a range of steps to boost supplies of key goods after severe summer flooding and recent cold snaps hit yields and drove up prices.

As part of these efforts, the central bank announced in October the country’s first interest rate hike in nearly three years.

However, NBS spokesman Sheng Laiyun said in announcing the figures that it would take time for such measures to begin to take effect.
Source: AFP

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