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Chinese premier calls for controls to slow booming economy
Beijing (AFP) Jul 26, 2006 Premier Wen Jiabao on Wednesday called for increased macroeconomic controls to rein in China's booming economy, including measures to curb fixed-asset investment and to tighten credit. Wen cited "prominent problems" in China's economic development in a televised meeting with top leaders of the country's provinces, cities and regions to discuss action to be taken in the second half of the year. "The main problems are: fixed-asset investments grew excessively quickly and this situation could become worse in the future. The currency credit release is excessive," Wen was quoted by the official Xinhua news agency saying. "Too much energy is being consumed and pressures on the environment are increasing," said Wen. "We must take effective measures to solve these problems and prevent the economy from growing too fast and overheating." Without specifying what measures will be taken, Wen said excessively rapid growth in fixed-asset investments, which generally involves investment in infrastructure, should be "firmly restricted." Credit growth should also be "appropriately controlled," Wen said. Chinese banks' loose lending policies are fueling a boom in investment-driven economic growth, which the leadership wants to replace with the healthier consumption-driven growth. China should also strengthen controls over the property market and bring order to the sector, Wen said, adding that property prices are "rising too fast" and should be "firmly controlled." To accomplish this, approvals of land for development should be handled in a strict manner, he said. The premier reiterated China's stance that the country will gradually increase the flexibility of the yuan, or renminbi, exchange rate. Wen also called for stepped up environmental protection and better use of foreign capital, and said farmers' income should be increased in order to raise their spending power. His comments came after China reported last week a 11.3-percent year-on-year growth rate in the second quarter, accelerating from an already high 10.3 percent in the first three months of the year and 9.9 percent for all of 2005. The faster growth came despite a series of measures in the first half of the year aimed at slowing the economy, including in April the first interest rate hike in 18 months. Similar statements were made by President Hu Jintao last Friday, reflecting Chinese leaders' increasing worries about frenetic investment, especially in infrastructure and property, even as domestic consumption remains low. Last week, the government announced a new hike to the reserve ratio requirements for banks in an effort to slow lending. On Monday, it unveiled new regulations to limit foreign investment in the overheated property sector. Community Email This Article Comment On This Article Related Links China News from SinoDaily.com
Heavy rains from Typhoon Kaemi pound China, 11 dead
Beijing (AFP) Jul 26, 2006 Eleven people were killed and several others left missing when torrential rains from Typhoon Kaemi caused widespread flooding in southeastern China Wednesday, as about 750,000 evacuees remained in shelters. |
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