Chinese Premier Wen Jiabao announced that China is aiming to keep inflation under control as well as avoid economic overheating in 2008. Wen told China's annual session of parliament that while the government wants steady economic growth this year, “We must give priority to the quality rather than speed of development.” Wen called for a prudent fiscal policy and tight monetary control, setting a target for consumer price inflation this year of 4.8 percent, the same as the actual rate in 2007. For budget purposes, the government has assumed that the country’s GDP will grow by 8 percent this year, far lower than the actual growth of 11.4 pct in 2007, he added. “The primary task for macroeconomic regulation this year is to prevent fast economic growth from becoming overheated growth and keep structural price increases from turning into significant inflation,” Wen said.
In a separate announcement, China's state planning agency said in a report drafted for the parliamentary session that there will be no increases in state-set prices in the near term. China’s oil and electricity sectors have been lobbying the agency to make adjustments to the retail guidance prices of gasoline, diesel and electric power. Meanwhile, Ma Xiuhong, vice minister of China's Ministry of Commerce, told Reuters that China's trade surplus will grow at a slower pace in 2008 because of weaker U.S. demand in the wake of the U.S. subprime mortgage loan crisis. “The impact from the U.S. credit crisis is becoming bigger and bigger, so this will definitely affect exports this year because demand from U.S. markets will become less,” Ma said.
Journal of Commerce
