China's economy is moving on the desired track of macro-economic control, according to an executive meeting of the State Council, the Cabinet, held on Wednesday.

"China has achieved great success in fighting the snow havoc and restoration work in snow and ice hit areas. The country's economy is maintaining stable growth momentum," said the meeting presided over by Premier Wen Jiabao.

The meeting pointed out that the agriculture sector is developing stably, the industry sector sees rapid growth and the country's economic restructuring has made new headway with the reform and opening-up continuing to move forward, adding that "the overall economic situation is better than expected."

China has maintained steady, rapid growth so far this year, despite the worst winter here in half a century and the spreading global credit crisis, with its economic growth slowed to 10.6 percent in the first quarter from 11.7 percent in the same period last year, said the National Bureau of Statistics (NBS) on Wednesday.

The meeting also said the country is facing a complex and challenging global economy environment with the lagging pace of world economic growth, uncertainties on global financial market and the rising price of grain, oil and other raw materials.

China's consumer price index (CPI), a key measure of inflation, was up 8.3 percent in March, following an 8.7 percent rise recorded for the previous month, according to the NBS.

Food prices soared 21 percent in the first quarter year on year. Prices of raw materials, fuels and power supply increased 9.8 percent in the first three months of this year, 5.7 percentage points higher than the level for the same period last year.

The meeting described the high price as the most prominent problem afflicting the current domestic economy, adding that the fixed asset investment growth pace is still quick.

NBS figures showed that the country's fixed asset investment reached 2.18 trillion yuan (US$311 billion) in the first quarter, up 24.6 percent year on year, which was 0.9 percentage points higher than a year ago.

The meeting reiterated that the government would continue adopting the tight monetary policy and prudent fiscal policy and to prevent an overheating economy and guard against a shift from structural price rises to evident inflation.

The People's Bank of China (PBOC), China's central bank said on Wednesday the reserve requirement ratio would be raised by 0.5 percentage points to a record high of 16 percent as of April 25.

"The rise, a further materialization of tight monetary policy, is aimed at strengthening liquidity management in the banking system and steering bank credits to grow reasonably," the PBOC stated.

(Xinhua News Agency April 17, 2008)