Now not the time to tighten policy further: economist

PUBLISHED : Saturday, 16 July, 2005, 12:00am
UPDATED : Saturday, 16 July, 2005, 12:00am

China's economy will reach its relatively fast growth target for the year if it sticks with present policies, senior economist Qiu Xiaohua said yesterday.

Mr Qiu, a deputy-director of the State Statistics Bureau, told the National People's Congress Finance and Economic Committee that now was not time to introduce new belt-tightening measures.

'The current focus in terms of macro control policies is to stabilise and fine tune the economy at a measured pace and proper timing,' Mr Qiu was quoted as saying by Xinhua.

'Now it's not a good idea to roll out any further tightening policies.'

Mr Qiu is the second senior government official to make clear Beijing will not introduce new measures to further rein in the economy, which grew 9.4 per cent year on year in the first quarter.

In an interview with the South China Morning Post last month, Cao Yushu , the deputy secretary-general of the National Development and Reform Commission, also said no further clampdowns were planned to be introduced this year.

In yesterday's meeting, Mr Qiu told committee members that China had seen positive signs in recent months that the economy was in the process of changing from the fast lane to a more stable track.

These signs included a steady rise in public consumption, robust foreign trade and buoyant investment momentum.

Also, the central government's macro-economic controls had succeeded in curbing runaway investment that once brought the national economy to the brink of overheating, he said.

'In the first half of this year, the economy ran steadily and major economic indicators ... showed that the overall situation is good,' he said.

'If we can maintain our grip, we should be able to achieve a relatively fast growth this year.'

But Mr Qiu cautioned that China's foreign trade surplus had grown too rapidly and more obstacles had emerged, slowing the growth of farmers' income. In addition, sluggish world economic growth would inevitably affect China, he said.

The State Statistics Bureau was one of the six departments that reported China's first-half economic performance to the committee yesterday.

In reviewing the economy, committee members suggested that the government should do more to help raise farmers' income and improve energy conservation efforts.

In particular, members expressed worry over bottlenecks in energy supplies and urged the government to ensure energy shortages would not worsen over the summer months.