China will target inflation as the top economic priority this year and narrow the gap between rich and poor as the government seeks to maintain social stability, Chinese Premier Wen Jiabao (溫家寶) told lawmakers in Beijing.
“We cannot allow price rises to affect the normal lives of low-income people,” Wen said in his state-of-the-nation report to the annual meeting of the National People’s Congress on Saturday.
“Inflation is a potential trigger point for social discontent,” said Liu Li-gang (劉利剛), an economist at Australia & New Zealand Banking Group in Hong Kong who formerly worked for the Hong Kong Monetary Authority and the World Bank.
The government needs to boost lending and deposit rates by 0.75 percentage point by year-end, as well as raising wages and giving subsidies to the poor, he said.
Wen identified illegal land seizures, food safety, house price increases and corruption as top public concerns and said institutional changes are needed to end the excessive concentration of power. The government will “decisively” counter inflation and make it the “top priority in macroeconomic control,” he said.
The budget deficit could be 900 billion yuan (US$137 billion), or 2 percent of GDP, 150 billion yuan less than targeted for last year, Wen said. He confirmed that the nation is maintaining a “proactive” fiscal policy and a “prudent” monetary stance.
“Expanding domestic demand is a long-term strategic principle,” Wen said in the report.
Subsidies for urban low-income earners and farmers and continued incentives for rural purchases of home appliances may boost spending, he said.
The premier had already disclosed an annual growth target of 7 percent for the five-year plan running through 2015, down from the previous 7.5 percent.
The world’s second-biggest economy faces heightened inflation and asset-bubble risks and banks may be saddled with more bad loans after a record expansion in credit drove China’s economic recovery.
Consumer prices rose an annual 4.9 percent in January and food prices jumped, even after the central bank increased interest rates and banks’ reserve requirements. Wen pledged a “comprehensive audit” of local-government debt, after a surge in borrowing linked to the stimulus program from late 2008.
To control inflation, the government will manage liquidity, ensure agricultural production and use price controls when needed, Wen said.
Officials will curb real-estate speculation and “adjust and improve” property tax policies, he added.
“The main challenge for controlling inflation is the property-price bubble stemming from overly loose monetary conditions relative to asset prices,” economists led by Peng Wensheng (彭文生) at China International Capital Corp Ltd (中國國際金融), said in a report on Wednesday.
China’s leaders are also seeking to maintain stability as the country shifts from a predominantly rural to mostly urban society. During the five years through 2015, the level of urbanization will rise to 51.5 percent from 47.5 percent, Wen’s report said.
Napoleon Osorio is proud of being the first taxi driver to have accepted payment in bitcoin in the first country in the world to make the cryptocurrency legal tender: El Salvador. He credits Salvadoran President Nayib Bukele’s decision to bank on bitcoin three years ago with changing his life. “Before I was unemployed... And now I have my own business,” said the 39-year-old businessman, who uses an app to charge for rides in bitcoin and now runs his own car rental company. Three years ago the leader of the Central American nation took a huge gamble when he put bitcoin
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
RSS