China’s Wen warns against economic policy pile-up

BEIJING, May 15 (BestGrowthStock) – Chinese Premier Wen Jiabao
warned the country faces tough choices in moderating economic
growth and must avoid piling on adjustment policies and risking
“negative consequences”, state media reported on Saturday.

His remarks, reported by the Xinhua news agency during a
recent visit to the northern port city of Tianjin, did not
suggest any policy shift, but underscored that policy-makers
want to move carefully and avoid overstepping in efforts to
temper inflation with signs that growth is slowing.

“At present, the national economy continues to improve, but
domestic and external conditions remain extremely complex, and
macro adjustment faces many dilemmas,” said Wen, according to
the report.

“Pay attention to coordination in macro economic policy, so
that it forms into a cohesive overall force and also prevent
negative consequences from multiple overlapping policies,” Wen
told officials in Tianjing, Xinhua said.

China’s gross domestic product expanded 8.7 percent in 2009
thanks to massive monetary and fiscal stimulus, and most
economists say growth in 2010 will top that figure, after
first-quarter year-on-year growth of 11.9 percent.

But the government is worried about inflationary pressures
and roaring real estate price rises and has been seeking to
temper those pressures, so far without clear effects.

Chinese annual inflation pushed up to an 18-month high in
April, when consumer prices rose 2.8 percent on a year earlier.

Property prices jumped 12.8 percent in April from a year
earlier, the fastest pace on record.

Wen’s comments indicated that the government is seeking to
bring down price pressures without risking economic growth, and
remains committed to the basic policy settings put in place to
counter the global financial crisis.

“Adhere to an active fiscal policy and an appropriately
loose monetary policy, and properly handle the direction,
intensity and pace of macro adjustment, maintaining balanced and
relatively fast economic development,” said Wen.

(Reporting by Chris Buckley)

China’s Wen warns against economic policy pile-up