Policy
China may slightly adjust macroeconomic policies: experts
(Xinhua)
Updated: 2009-11-06 15:58
One year after China launched the stimulus package and regained economic growth momentum, experts said the government was set to stick to pro-growth macroeconomic policies while making minor adjustments in the prospect of inflation.
Liu Shijin, vice director of the Development Research Center of the State Council, or China's Cabinet, told a forum held Thursday that many people were looking at the issue of price since both the consumer price index (CPI) and producer price index (PPI) would probably begin to rise at the end of 2009.
"I think the CPI would probably grow around 3 percent year-on-year in the first half of next year. As to the second half, the CPI movement trend has many uncertainties and some has forecast a growth of more than 5 percent," Liu said.
So China's macroeconomic policies in 2010 should focus on maintaining steady economic growth and stable prices, he said.
China's CPI, a main gauge of inflation, dipped 1.1 percent year-on-year in the first nine months. While the September CPI was up 0.4 percent over the previous month.
It was the first time this year that China's policymakers made inflation control one of their priority tasks.
Jia Kang, director of the Research Institute for Fiscal Science at the Ministry of Finance, said China's pro-growth policy frame was expected to continue working for some time while the government could use some economic tools to pursue some long-awaited reforms.
At present, there was a prospect of inflation, which meant no inflationary pressure for now, he said.
"We need to adjust the economic structure and transform the economic growth pattern so that we will be in a better position to cope with future inflation," he said.
The current economic circumstance gave China a good opportunity to use economic tools, for instance, increasing energy tax rate and levying property tax, to restructure the economy and transform the growth pattern, he added.
Chen Dongqi, deputy director of the Macroeconomic Research Institution under the National Development and Reform Commission, told the forum that next year's policies should help ensure domestic demand, especially consumption, to continue fueling the economic growth.
"The continuity of policies next year will not only feature in the fiscal and monetary policies, but also in specific measures adopted to stimulate the growth, for instance measures to spur consumption, to increase income and to improve consumption climate," he said.
Chen said formulating future Chinese economic policies should also take into account of rising financial cost for both reasons: One was that China would need to develop a low carbon economy to cope with the climate change and the other was rising prices of properties.
Chen also suggested the government should prepare an exit monetary policy since some major economies, such as Australia and India, had already made, and would make, some changes on their monetary policies.
Li Yang, vice director of the Chinese Academy of Social Sciences, said the side effect of the four-trillion-yuan ($586 billion) investment plan, which was at core of the country's stimulus plan, had begun to manifest.
China's GDP expanded 7.7 percent year-on-year in the first nine months. According to the National Bureau of Statistics, consumption in the first three quarters contributed four percentage points to GDP growth while investment accounted for 7.3 percentage points. Net exports had an adverse impact on the economic growth.
Li said that in the past year, the plan focused on infrastructure construction. "(In the future) The government should give more support and investment to small and medium-sized private companies to increase employment."
On November 5, 2008, the State Council announced a four-trillion-yuan economic stimulus plan aimed at boosting domestic consumer demand in the face of slump exports.
