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Economy

Economic meeting to guide direction

By Zhu Ping (China Daily)
Updated: 2009-12-07 07:11

China is expected to fine-tune its macroeconomic policies, one year after it launched the massive $586-billion stimulus package to save the economy from the worst global financial crisis since the 1930s.

A government conference to lay the groundwork for the country's economic policies not only for 2010 but for the next five years may wrap up today, according to media reports.

Decisions made at the central economic conference, which began on Saturday, will influence policies next year, the last years of the 11th five-year plan (2006-2010), and guide directions in policy for the next five-year plan.

No details of the conference have been released.

But experts said a Nov 27 meeting could set the tone for the conference.

That meeting concluded with officials broadly stating that China will "maintain the continuity and stability of economic policies, and continue to implement the proactive fiscal policy and loose monetary policy".

The issues most likely to be high on the conference agenda include how the government will improve the quality of growth, speed up economic restructuring and boost domestic consumption.

China's gross domestic product (GDP) grew by 8.9 percent year-on-year in the third quarter and GDP growth for the year is expected to exceed 8 percent, government statistics showed.

To boost economic growth, the government must support policies that increase the income of residents, tackle healthcare reform and invest more in education, experts said.

The stimulus package has played the most important role in reviving the economy, but it also made the economic growth more reliant on investment, said Liu Manping, a researcher at a price monitoring institute under the National Development and Reform Commission, the country's top economic planning body.

"China should gradually and moderately adjust its macro policies to avoid any huge impact on economic growth," he said.

Jia Kang, director of the Research Institute for Fiscal Science at the Ministry of Finance, said that "the government may perhaps change its policies in the industrial sectors because of overcapacity and the increasingly ballooning property industry".

Fluctuating prices in the housing market may ease in the second quarter of next year if monetary policies are adjusted, said Wang Zhihao, an economist with Standard Chartered Bank.

During a visit to a number of low-income housing projects on Nov 28, Premier Wen Jiabao said the government should curb speculation in the housing market.