China plans to put leash on its economic growth

Beijing, January 29:

The Chinese economy grew too quickly in 2006 and the government wants the rate to slow this year, a senior economic planning official said today.

“Economic development is moving in the expected direction but economic growth in 2006 was a bit too high and we want it to slow to a reasonable growth rate this year,” Han Yongwen, secretary-general of the National Development and Reform Commission, said. Han declined to give a forecast for economic growth this year, saying this would be set at the National People’s Congress to be held in early March.

He noted that at present China’s investment, consumption and foreign trade are ‘not in balance.’ The economy grew by 10.7 per cent last year, beating market forecasts and raising expectations the government would take fresh policy measures this year to try and cool the growth pace.

Focus on consumption

TOKYO: An IMF official called on China to shift its focus to stimulating domestic demand, in part by providing more social welfare, in order to cut its reliance on exports. The Chinese banking system has poured money into heavy industrial investment but shied away from lending to small- and medium-size businesses. “With the population of 1.3 billion people, China has a huge domestic market. It does not need to rely on exports for economic growth,” said Steven Dunaway, deputy director of the IMF Asia and Pacific Department. — AFP

Control over sales

SHANGHAI: China announced new rules aimed at guaranteeing that state assets identified as key to the nation’s economic security are not sold too cheaply to foreigners. Private deals will be strictly controlled and will require approvals from the national and provincial state assets regulators. Transactions involving public bids for the sale of state-owned firms’ assets must set a minimum sale price of 90 per cent of the regulators’ assessment pric-e. Once a figure for sale or transfer of state assets to a foreign company had been determined, negotiators cannot sell more cheaply. — AFP