Nation pledges to cut trade surplus ahead of Paulson visit
(Xinhua)Updated: 2006-12-09 11:06
An effort this year to curb runaway growth in real estate investment and bank lending took six months to begin showing results. And that required Beijing to raise interest rates twice and impose multiple waves of increasingly drastic investment controls.
On Friday, the government imposed a new measure to curb the lending boom, ordering banks to buy up to 100 billion yuan (US$12 billion) in bonds issued by the central bank to reduce the amount of money available for credit, Dow Jones Newswires reported, citing bankers. There was no announcement by the central bank of the move.
China's economy expanded by 10.7 percent in the first nine months of this year. Communist leaders want to continue fast growth to ease poverty but are trying to restrain industries such as real estate, auto manufacturing and textiles where they worry that spending on unneeded factories and other assets could fuel inflation or a debt crisis.
The latest plan was issued by the Central Economic Work Conference, a body created by the party to help manage an economy in which two decades of reforms have weakened state control.
The reports Friday didn't say whether the plan sets an economic growth target. Earlier reports cited a party researcher who said planners called for growth to slow, setting a target of 8 percent next year, down from the 10.7 percent rate for the first nine months of this year.
The government said this week it expects China's global trade surplus to hit a record US$168 billion this year.
Washington and other trading partners are pressing Beijing to raise the State-controlled value of its currency in order to encourage imports and to ease market access for foreign companies.
The flood of export revenues has strained Beijing's ability to restrain inflation pressures. The central bank has been forced to buy up tens of billions of dollars in foreign currency every month in order to control the growth of the money supply, piling up reserves estimated to have surpassed US$1 trillion.
Delegates at the planning conference recommended that China import more advanced technologies, management and foreign expertise, according to news reports.
They called for boosting consumption by creating more jobs for the rural and urban poor in order to raise incomes.
The delegates also called on Chinese companies to invest more abroad _ another long-term party goal.
Chinese companies invested US$12.3 billion overseas last year, accounting for just 0.59 percent of global foreign investment, according to Xinhua.
Government figures show that domestic consumption accounted for 51.1 percent of China's economic output in the first nine months of this year, down from 62 percent in the 1980s, the agency said.
The decline in the public consumption share of output was even sharper, falling from 48.8 percent in 1991 to 38.2 percent this year, the agency said.
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