Inflation won't be a problem, says auditor

PUBLISHED : Sunday, 20 June, 2004, 12:00am
UPDATED : Sunday, 20 June, 2004, 12:00am

The mainland's audit chief has added weight to official pledges to keep inflation under control, by stressing the government's ability to tackle price increases.

The official China News Service quoted Li Jinhua, auditor-general of the National Audit Administration, as saying at a meeting on Friday that he believed the mainland would not face serious inflation problems.

Mr Li cited the predominance of the state-owned banks in the mainland's banking system, saying this greatly increased the effectiveness of financial measures to regulate the economy.

He said he believed inflationary factors would be kept under control.

Mr Li said rapid economic growth had put pressure on the economic environment, with the acceleration of infrastructure construction increasing the use of energy and other resources.

In a separate interview with Xinhua, Xu Dingming , head of the energy bureau with the National Development and Reform Commission, said that in addition to the supply and demand question, China also needed to increase its efficiency in the use of energy.

Quoting 2002 figures, Mr Xu said every US$10,000 in gross domestic product growth incurred the use of 11.8 tonnes of coal in China.

This was three times the coal usage of the United States, five times Germany's and six times Japan's, he said.

Mr Xu attributed the low energy efficiency to the pursuit of growth in production. To solve the power shortage, China should invest more in energy infrastructure and, at the same time, promote conservation of resources and energy efficiency, he said.

China Central Television reported that the commission had announced on Friday that it would allocate money raised from sales of bonds to energy and water conservation projects.