Various levels of government have been urged to remain sober-minded when applying national monetary tightening and fiscal prudence policies.

 

National Development and Reform Commission Minister Ma Kai listed "preventing economic growth from evolving from rapid to overheating and preventing price hike shifts from going from structural to inflationary" as top priorities.

 

Speaking at a three-day annual development and reform conference starting Friday, Ma echoed the top national leadership, urging participants to "unify thoughts" and give priority to the "two preventions".

 

He explained the potential international recession, and the country's investment frenzy, flooded money supply and trade surplus, are headaches for China's leadership.

 

They also face challenges such as a weak agricultural sector, arduous energy conservation and emission reduction tasks, and public welfare issues, he added.

 

The conference is the second high-level meeting within a week mobilizing resources for "sound and fast" economic growth in 2008. After a Monday-through-Wednesday closed-door meeting, China's top decision-makers prepared a list of "development tasks" for the National People's Congress to vote in March.

 

Before March, provincial and municipal-level governments and people's congresses would meet to discuss the investment spree and inflation.

 

Ma said monetary policy should play a greater role in macro-control policies, and China would strictly control loans to better regulate domestic demand and balance international payments.

 

Since 2003, China's economy has developed at an annual average rate of more than 10 percent. The figure reached 11.5 percent in the first nine months of 2007.

 

Ma identified several major economic tasks for 2008:

 

Using macroeconomic controls to prevent the economy from overheating and price hikes from leading to evident inflation.

 

Fully implementing tight monetary policy and prudent fiscal policy, while increasing fiscal expenditure in social security, medicare, sanitation, education and household benefits. Low-income families should receive more stipends offsetting price hikes.

 

Consolidating the role of agriculture in China's economic growth.

 

Basing technical innovation on market demand and centering it on technologies to overcome development bottlenecks. Enterprises should take center stage in innovation to boost national competence, and reduce emissions and conserve energy.

 

Use prices, taxations and financial policies to stimulate energy conservation while establishing environmentally friendly and compulsory market access criteria.

 

(China Daily December 8, 2007)