Can it or can it not? The question of whether China can rein in inflation and sustain its blistering pace of growth is one that has been at the forefront of investors’ minds.
Wen Jiabao, China’s Premier, tackles this question head-on in Friday’s FT. And his answer is an emphatic yes.
Wen writes:
China has made capping price rises the priority of macroeconomic regulation and introduced a host of targeted policies. These have worked. The overall price level is within a controllable range and is expected to drop steadily. The output of grain, of which there is now an abundant supply, has increased for seven years in a row. There is an oversupply of main industrial products. Imports are growing fast. We are confident price rises will be firmly under control this year.
China is now at a new starting point in its drive for development. We have adopted the 12th Five-Year Plan which calls for shifting the development model. We will continue to pursue economic structural adjustment, boost research and development, and education, save energy and resources, promote ecological and environmental conservation, and narrow the regional and urban-rural gap. China’s drive for industrialisation and urbanisation is gathering pace. Its economy is increasingly market-oriented and internationalised. We are fully capable of sustaining steady and fast economic growth.
Read the rest of Wen’s piece here.
Related reading:
China: democracy by 2017?, beyondbrics
China: biggest trade power by 2015, beyondbrics
China’s inflation will alter face of its economy, FT
The myth of China’s unbalanced growth, The A-list
Chart of the week: inflation stoking inequality in China and India, beyondbrics
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