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Macro control takes effect
With a slower pace of growth in Chinas economy, the consumer prices in the first quarter also continued the trend of falling, a sign that the inflation control measures have taken effect. In the meanwhile, the pre-adjustment and fine-tuning of macro-control policies unveiled since the end of last year have also begun to show effects.
The once skyrocketing consumer price index has seen considerable drops as it declined to 3.2 percent in February from Januarys 4.5 percent.
Experts believed that despite rebound of some food prices and rise of fuel prices in March, the consumer prices will remain in decline on the general as the result of contracting aggregate demands.
Liu Yuanchun noted that China took stabilizing prices as the top priority of macro economic control last year, thus unveiling a series of effective anti-inflation measures.
"Therefore, the inflation pressure will ease this year as the result of the lag effects of those measures. Liu added.
Different from Lius optimistic view, Zhang Liqun warned against a rebounding inflation pressure since the outstanding broad money supply (M2), which covers cash in circulation and all deposits, rose 13 percent year on year to 86.72 trillion yuan by the end of February. Moreover, Zhang further cautioned that imported inflation, volatile global oil prices and uncertain U.S. monetary policies all weighed on the concerns,
The People's Bank of China, the central bank, keeps prudent monetary policy this year compared with its tight strategy for most of last year. Chinas new loans in the first quarter are expected to overpass that of last year.
It said in its first-quarter meeting that it would use various kinds of monetary policy tools to guide supplies of money and credit to grow steadily and to maintain social financing on a reasonable scale, sending policy signal that finance will support a stable and relatively fast economic growth.
China International Capital Corporation Limited said in its latest report that the fiscal revenues in the first two months fell sharply from that in the same period of last year, as the result of structural tax reductions. The national budget increased by a large margin in the fixed asset investment in the first two months, showing that proactive fiscal policy began to take effect in the stabilizing economic growth. |
