China seeks bigger int'l role

08:41, December 13, 2010      

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At an annual top-level economic conference that concluded Sunday, Chinese authorities demonstrated their determination for a greater and more decisive role in the post-crisis international community, while also pledging to curb excessive government spending.

And with national inflation soaring to a 28-month high in November, the top leadership also vowed to focus on managing inflation expectations in 2011, according to a government statement.

The global economy is likely to resume growing next year, though many uncertainties will remain, it said.

Participants at the meeting agreed that the country should further cultivate its growth areas, thereby strengthening its role in the transformation of the world economic regime.

The meeting also stressed steady growth in fiscal revenue, as well as austerity in government-level administrative spending, adding that local governments should strengthen their debt-management efforts.

"China will further improve the Renminbi's exchange rate formation mechanism and keep the yuan basically stable and at a reasonable and balanced level," it said.

"The priority is to handle the relationship between maintaining steady and relatively fast economic growth, economic restructuring and managing inflation expectations in an active and stable way," the statement said.

November's inflation rate of 5.1 percent was fueled mostly by soaring food prices, according to data released Saturday.

The three-day Central Economic Work Conference, which was presided over by President Hu Jintao and attended by Premier Wen Jiabao and other top leaders, resulted in the agreement to give priority to stabilizing prices next year.

On Friday, the day before the inflation data was released, the country's central bank said it would raise banks' reserve requirement ratio by 0.5 percent, effective December 20. It will be the sixth such hike this year to ease inflationary pressure.

The meeting also said China will seek to accelerate its strategic economic restructuring next year in an effort to shift from an over-dependence on exports and an investment in industries to boosting private consumption and relying on the domestic market.

China's economy grew 9.6 percent in the third quarter of this year, slowing from a 10.3 percent increase in the second quarter and an 11.9 percent surge in the first quarter.

Wan Jun, an economist from the Institute of World Economics and Politics at the Chinese Academy of Social Sciences (CASS), told the Global Times that China has strived in recent years to maintain economic growth while restructuring the economy in an effort to combat the global financial crisis. Now, he said, it is time for the government to take the soaring inflation into consideration in its policymaking.

"In this case, it is a challenge to the government to practice the art of balance - the balance among GDP growth, economic restructuring and curbing inflation," he said.

The government at this year's Fifth Plenary Session of the 17th CPC Central Committee did not provide any specific targets for next year's growth, Wan said.

"If we try to maintain a moderate growth in GDP rather than a rapid one, then main-taining economic growth does not run contrary to curbing inflation," he said.

By Song Shengxia, Globla Times
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