Policy tweaks to be in line with a changing world

PUBLISHED : Wednesday, 01 February, 2012, 12:00am
UPDATED : Wednesday, 01 February, 2012, 12:00am
 

The central government will fine-tune its policies in line with changes in domestic and international economic environments, while continuing to curb speculative property purchases, Premier Wen Jiabao said.

The mainland will continue the curbs which have dampened prices after the cost of a home rose by more than 10 times in the past 10 years, Wen told a State Council meeting.

He said the government will promote a 'reasonable return of housing prices' in the market, and take measures to make more affordable housing available, according to a statement posted on the government's website yesterday.

Wen also mentioned the sensitive topic of political reform and called on officials to allow people to criticise government.

'[We] must unswervingly pursue institutional reform of the economic and political system as well as of other areas,' he said.

'We should create conditions for the people to criticise the government and we should carefully listen [to] them and fully reflect their views,' Wen said at the meeting, held to discuss the government work report he will present to the annual session of the National People's Congress next month.

The mainland's economy can maintain stable and quick growth over the long term, Wen said. He said the government will strive to maintain steady growth in investment and exports and guarantee funding to big state-backed projects already under way.

Growth in the world's second-largest economy has slowed steadily in recent quarters, prompting some economists to warn of the risk of a hard landing. Gross domestic product (GDP) growth fell to a two-and-a-half-year low of 8.9 per cent in the three months to December, down from 9.1 per cent in the third quarter, 9.5 per cent in the second and 9.7 per cent in the first.

For the full year, GDP growth slowed to 9.2 per cent, down from 10.4 per cent in 2010.

Many economists at government think tanks and international institutions have forecast that mainland economic growth will continue to fall this year, largely because of weakening exports amid sluggish growth in the US, the spreading debt crisis in the euro zone and lower capital investment.

Wen said his government will use all its advantages to 'actively cope with the challenges and overcome difficulties, in order to achieve a smooth and relatively fast economic development'.

Chinese leaders, including Wen, have recently warned of an 'extremely grim and complicated' global outlook this year and said they would 'fine-tune' Beijing's two-year-old macroeconomic tightening policy to ensure stable growth amid changes in the global economy.

Housing prices in urban areas, particularly in first-tier cities such as Shanghai and Beijing, have risen rapidly in the past decade, triggering widespread discontent among residents, particularly young people struggling to buy a first home. The government has introduced measures, such as restricting the buying of multiple homes, to cool the red-hot market.

'We will continue to strictly implement and gradually improve policies aimed at discouraging house-buying for speculation or investment purposes,' Wen said.

180,000

The number of protests recorded on the mainland in 2010

- The government plans to build seven million houses this year

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