Home Tools: Save | Print | E-mail | Most Read | Comment
Inflation major concern of lawmakers, advisors
Adjust font size:

Inflation remains a primary challenge China faces this year, and thus a focus topic among national lawmakers and political advisors gathering here for their annual full sessions, who said an unwavering tight monetary policy may help maintain steady growth.

China was confronted with more domestic economic challenges as soon as the new year started while the world economy continued to slow down as the impact of the U.S. sub-prime crisis rippled.

Having been troubled by rising consumer price index (CPI) since mid 2007, the country was hit by the worst snow havoc in 50 years in January, which caused a loss of at least 111.1 billion yuan (15.43 billion U.S. dollars).

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.

The 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 (CPPCC), the country's top political advisory body.

However, Justin Yifu Lin, a deputy to the National People's Congress (NPC) and the World Bank's new chief economist and senior vice president, noted the U.S. subprime crisis would have limited impact on China.

"The demand by the U.S., China's second-largest trading partner, would not decrease by a large margin as most of Chinese exports to it were low- and middle-end," the national lawmaker said.

Lin's view was shared by Li. He predicted China's GDP growth could still hit around 10 percent this year and expected stable CPI in the second quarter and a light drop in the third and fourth quarters.

A recent online survey by official website xinhuanet.com indicated that price hike is also the "topic of most concern" of Chinese netizens when the two sessions of national lawmakers and political advisors approach.

Song Guoqing, a professor at the China Economic Research Center under Beijing University, believed the tight monetary policy and government's determination to curb inflation was crucial to ease the public anticipation toward 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 (PBOC) will keep the tight monetary policy unchanged to rein in growing inflation, said the central bank's vice governor Yi Gang.

The central bank had taken a series of measures such as raising the reserve requirement ratio 11 times and the benchmark interest rates six times since last year to absorb excess liquidity and the measures had played an active role in slowing down the inflation growth.

Political advisors and lawmakers, however, have voiced their calls urging the government to take measures to protect the interests of low-income earners, who are affected most by the growing inflation.

"To provide low-income people a protective umbrella should be put on the top agenda of the government," said Jia Kang, a CPPCC member and director of the Research Institute for Fiscal Science under the Ministry of Finance.

"I believe the government will make greater efforts to solve social issues and improve people's livelihood through increasing fiscal revenue and making use of other resources," he said.

The CPPCC National Committee and the NPC will convene their annual full sessions on Monday and Wednesday respectively. Each will last more than 10 days.

(Xinhua News Agency March 3, 2008)

Tools: Save | Print | E-mail | Most Read
Comment
Pet Name
Anonymous
China Archives
Related >>
- Think tank: Higher rates no way to check inflation
- Handouts are not the answer to inflation
- Yuan rises faster against US dollar to battle inflation
Most Viewed >>
- White paper published on China's rule of law
- Workers face imprisonment for spreading porn
- Top political advisory body starts annual session
- Defense budget to grow 17.6 percent in 2008
- 'Police to be more cautious in sex pics investigation'
Questions and Answers More
Q: What kind of law is there in place to protect pandas?
A: In order to put the protection of giant pandas and other wildlife under the law, the Chinese government put the protection of rare animals and plants into the Constitution.
Useful Info
- Who's Who in China's Leadership
- State Structure
- China's Political System
- China's Legislative System
- China's Judicial System
- Mapping out 11th Five-Year Guidelines
Links
- Chinese Embassies
- International Department, Central Committee of CPC
- State Organs Work Committee of CPC
- United Front Work Department, Central Committee of CPC