Sat, Dec 10, 2011 - Page 11 News List

China eyes ‘prudent’ policy in 2012

Bloomberg

China will maintain a “prudent” monetary policy and a “proactive” fiscal policy next year, Xinhua news agency reported, citing a meeting of the Chinese Communist Party’s Politburo chaired by Chinese President Hu Jintao (胡錦濤).

The decision of the 25-member body that oversees policymaking came ahead of a work conference that sets economic guidelines for the coming year. The event might take place from Monday through Wednesday, according to the Economic Observer newspaper.

China has already eased monetary policy to aid growth, this month cutting the amount of cash lenders need to set aside as reserves for the first time since 2008.

“The word prudent will have a very elastic meaning in 2012,” said Stephen Green, a Hong Kong-based economist with Standard Chartered PLC.

While this “likely signals a cautious approach” to further easing in the short term, “the money tap will be loosened, no doubt,” he said.

In December last year, the Politburo said the nation would shift its monetary policy stance to “prudent” from “moderately loose,” with controlling inflation the top priority.

China will “preset or fine tune policies in light of changes in economic development,” Xinhua reported yesterday, citing a statement issued by the Politburo.

Beijing would continue to balance efforts to “ensure stable and relatively fast economic growth, while adjusting the economic structure and regulating inflationary expectations,” the report said.

Officials are still wrestling with the aftermath of a 4 trillion yuan (US$631 billion) stimulus package and record lending that helped to lift the economy out of the 2008-2009 global financial crisis.

Inflation has cooled for four consecutive months after hitting a three-year high of 6.5 percent in July.

China will also maintain its “unswerving stance” on property-market regulation next year, in order to return housing prices to a “reasonable level,” Xinhua said.

Last month’s housing transactions rose 12 percent, according to data from China’s National Bureau of Statistics yesterday.

This story has been viewed 2409 times.
TOP top