China leaders draft 2009 macroeconomic policy
Friday, 12 December 2008
BEIJING, Dec 11 (AFP): China's top leaders ended the most important economic policy gathering of the year yesterday, focusing on how to stimulate demand and create jobs in 2009 to ward off the global economic crisis.
The annual Central Economic Work Conference, chaired by President Hu Jintao and Prime Minister Wen Jiabao, wrapped up after three days with a macroeconomic policy blueprint for next year, the government said.
"The development of our nation's economy faces many challenges in 2009, but also many opportunities," said a communique issued by the conference and carried on state television.
"To overcome the serious influence of the international financial crisis and carry out next year's economic tasks in a good way is of vital importance to safeguarding the stability of the reform and opening programme and fulfilling ... our plan to build a well-off society."
The work conference called for expanding domestic demand, maintaining "fastpaced" economic growth by weaning the nation away from its dependency on exports, the communique said.
The central bank was specifically tasked with creating a "suitably relaxed monetary policy" capable of advancing economic growth, the People's Bank of China said in a statement posted on its website on the conference.
"We will use all monetary tools to flexibly adjust the supply and demand for capital and adopt stronger measures to support the development of small and medium enterprises," the bank said.
The 2009 macroeconomic policy was described in broad-brush strokes with detailed plans expected to be put before and approved by China's annual session of parliament in March.
"The main tasks facing China's economy is to stimulate investment and consumer spending, so we should be seeing some fiscal measures aimed at lowering taxes," the China News Service quoted Zhao Xijun, a finance expert at the People's University, as saying.
"Monetary policy is likely to be relaxed and we will see further cuts in lending and deposit rates and we shouldn't rule out an increase in bank loans." During the conference, leaders had been expected to discuss a proposal by the finance ministry to let the 2009 fiscal deficit swell to 280 billion yuan (40.7 billion dollars), up 56 per cent from this year, to help maintain growth, media reports said.
In the past few months Beijing has already introduced a series of monetary and fiscal policies aimed at blunting the impact of the global meltdown, including a four-billion-yuan spending package and steep interest rate cuts.
"The fundamental problem facing China's leaders is income distribution which is resulting in a surplus in industrial goods and property... as the global economy slows down," Andy Xie, an independent economist in Shanghai, told the news agency.
"What China needs are strong capital measures that can make industrial goods and property affordable to people."
China's economic growth slowed to 9.0 per cent in the third quarter of this year as global financial woes started taking a toll, prompting the government to announce its stimulus package.
As a result of the slowdown, growth in the world's fourth-largest economy weakened to 9.9 per cent over the first three quarters of the year.
Ahead of the three-day conference, Chinese economists predicted the government would target an eight-per cent economic growth rate for 2009, a pace that would be the minimum required to keep the unemployment situation under control.
"The meeting will detail measures for achieving at least eight per cent growth in 2009," said Song Hong, a researcher with the Chinese Academy of Social Sciences (CASS), a top government think tank.
The annual Central Economic Work Conference, chaired by President Hu Jintao and Prime Minister Wen Jiabao, wrapped up after three days with a macroeconomic policy blueprint for next year, the government said.
"The development of our nation's economy faces many challenges in 2009, but also many opportunities," said a communique issued by the conference and carried on state television.
"To overcome the serious influence of the international financial crisis and carry out next year's economic tasks in a good way is of vital importance to safeguarding the stability of the reform and opening programme and fulfilling ... our plan to build a well-off society."
The work conference called for expanding domestic demand, maintaining "fastpaced" economic growth by weaning the nation away from its dependency on exports, the communique said.
The central bank was specifically tasked with creating a "suitably relaxed monetary policy" capable of advancing economic growth, the People's Bank of China said in a statement posted on its website on the conference.
"We will use all monetary tools to flexibly adjust the supply and demand for capital and adopt stronger measures to support the development of small and medium enterprises," the bank said.
The 2009 macroeconomic policy was described in broad-brush strokes with detailed plans expected to be put before and approved by China's annual session of parliament in March.
"The main tasks facing China's economy is to stimulate investment and consumer spending, so we should be seeing some fiscal measures aimed at lowering taxes," the China News Service quoted Zhao Xijun, a finance expert at the People's University, as saying.
"Monetary policy is likely to be relaxed and we will see further cuts in lending and deposit rates and we shouldn't rule out an increase in bank loans." During the conference, leaders had been expected to discuss a proposal by the finance ministry to let the 2009 fiscal deficit swell to 280 billion yuan (40.7 billion dollars), up 56 per cent from this year, to help maintain growth, media reports said.
In the past few months Beijing has already introduced a series of monetary and fiscal policies aimed at blunting the impact of the global meltdown, including a four-billion-yuan spending package and steep interest rate cuts.
"The fundamental problem facing China's leaders is income distribution which is resulting in a surplus in industrial goods and property... as the global economy slows down," Andy Xie, an independent economist in Shanghai, told the news agency.
"What China needs are strong capital measures that can make industrial goods and property affordable to people."
China's economic growth slowed to 9.0 per cent in the third quarter of this year as global financial woes started taking a toll, prompting the government to announce its stimulus package.
As a result of the slowdown, growth in the world's fourth-largest economy weakened to 9.9 per cent over the first three quarters of the year.
Ahead of the three-day conference, Chinese economists predicted the government would target an eight-per cent economic growth rate for 2009, a pace that would be the minimum required to keep the unemployment situation under control.
"The meeting will detail measures for achieving at least eight per cent growth in 2009," said Song Hong, a researcher with the Chinese Academy of Social Sciences (CASS), a top government think tank.