THE chances of China bringing inflation down to its official target of less than 10 per cent are good, a vice-minister says. ''The credit-tightening package we've introduced is beginning to work, but it won't be until the second half that we will see a sharper drop in inflation. And when that happens, we can bring inflation down to the single-digit rate for the whole year,'' said Zheng Silin, Vice-Minister of Foreign Trade and Economic Co-operation, yesterday. Mr Zheng said in trying to bring down inflation, China had to ensure that credit-tightening would not dampen growth drastically and create unemployment. ''We've to tread the line carefully. The goal is always to achieve low inflation, low unemployment and high growth. That's not an easy task.'' Inflation eased in April, with consumer prices up 21.7 per cent on the same month last year, but down from 22.3 per cent rate in the first quarter. Hong Kong analysts said it was unlikely for China to achieve inflation of below 10 per cent. The more realistic figure would be 12 per cent. Mr Zheng also said that within the next seven years, China was expected to import US$1 trillion worth of imports to support its economic growth. But unless exports grew robustly, it would not be possible for the country to finance the import level. He said that a key aim of the tax reforms implemented this year was to enable the state to have enough revenue to support infrastructure projects in the inner provinces. The reforms would raise the state's share of revenue gradually to about 60 to 70 per cent. Inner provinces have been expanding much slower than the coastal cities since the country's opening to the outside world and the central authorities fear that if the income gap between the two regions continues, it would impinge on social stability.
