China to switch monetary policy next year

[News_Editor]

China to switch monetary policy next year

2010-12-04 00:06:59 GMT+7 (ICT)

BEIJING, CHINA (BNO NEWS) -- China on Friday said that it will switch its monetary policy to a prudent stance next year in order to tackle rising inflation and keep economic growth at a sustainable pace, the state-run Xinhua news agency reported.

The decision of continuing the proactive fiscal policy was agreed in a meeting of the Political Bureau of the Communist Party of China (CPC) Central Committee, and was chaired by President Hu Jintao, who also is the CPC's Secretary General.

The CPC Central Committee said that next year's main task will be accelerating the transformation of the economic development pattern while macro-regulation should be more targeted, flexible and effective.

China shifted its fiscal policy from a prudent to a proactive stance in 2008. The Asian nation also modified its monetary policy from tight to moderately loose in order to counter attack the global financial crisis.

This special move to counter crisis also included a stimulus package to fund infrastructure construction and improve people's livelihoods of about 4 trillion Yuan. As China's economic growth has stabilized, the 2008 modifications are not fundamental.

China's economy grew 9.6 percent during the third quarter this year, a slight decrease from its 10.3 percent in the second quarter and 11.9 percent in the first quarter. However, consumer inflation recorded a 25-month high of 4.4 percent in October due to food price rises, well over the government’s target of 3 percent.

The Chinese government announced the implementation of harsh measures to control inflation, including price regulations when needed. It also increased the supply of vegetables, meat and other food.

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