Business News
China plans tougher measures to combat inflation, overheating
By DPA
Dec 5, 2007, 12:19 GMT

Beijing - Chinese leaders on Wednesday said they would take tougher measures to curb inflation and overheating next year, amid signs that current policies have failed to slow the country's rampant economic growth.

The government will move to 'tight' monetary control after 10 years of 'prudent' control, with stricter limits on lending, the leaders said at the close of an economic work conference.

President Hu Jintao and Premier Wen Jiabao made speeches at the meeting, which set its primary task for next year as preventing overheating and avoiding a 'shift from structural price rises to evident inflation.'

The government planned to spend 'significantly' more on social security, health care, education, housing and allowances for people on low incomes next year, state media said.

It will 'strictly check' credit growth to 'accommodate social demand and to promote a balance between foreign spending and earnings,' the official Xinhua news agency quoted a communique from the meeting as saying.

New projects would undergo 'rigorous examination' and 'forceful measures' would be used to curb price rises for essential food items such as grain, edible oil and meat, the agency said.

'The meeting stressed that China's industrialization and modernization process is now at a critical point,' it said.

The new measures build on economic policies promoted at the five- yearly congress of China's ruling Communist Party in October.

The party aims to promote domestic demand and reduce China's growing trade surplus, moving towards more sustainable and environmentally friendly economic growth.

China said its estimated gross domestic product (GDP) soared by 11.5 per cent in the third quarter, providing more evidence that current measures to slow growth might not be enough.

It followed 11.9-per-cent GDP growth in the second quarter, the highest rate in 12 years, and an 11-year high in monthly inflation of 6.5 per cent in August.