Sta­bil­ity and progress to be eco­nomic keys

Top lead­ers vow to balance growth with risk preven­tion as they set the tone for next year

China Daily (Hong Kong) - - FRONT PAGE - By XIN ZHIMING xinzhim­ing@chi­nadaily.com.cn

The na­tion’s top lead­ers pledged on Fri­day to balance sta­ble growth and risk preven­tion as they wrapped up an an­nual tone-set­ting meet­ing that mapped out eco­nomic poli­cies for next year.

“Main­tain­ing sta­bil­ity while seek­ing progress” will be an im­por­tant prin­ci­ple for China’s eco­nomic work next year, said a state­ment from the three-day Cen­tral Eco­nomic Work Con­fer­ence.

The meet­ing agreed that China’s eco­nomic pol­icy stance will re­main largely sta­ble next year. It said that China will main­tain a pru­dent and neu­tral mone­tary pol­icy and a proac­tive fis­cal pol­icy in 2017, ac­cord­ing to a re­port from Xin­hua News Agency.

The na­tion should main­tain an ap­pro­pri­ate growth range and try to pre­vent risks in key ar­eas, ac­cord­ing to the state­ment.

The coun­try also should con­tinue to push for­ward sup­ply-side struc­tural re­form aimed at cut­ting ex­ces­sive ca­pac­ity and low­er­ing the tax bur­dens on en­ter­prises, and keep liq­uid­ity and the yuan ba­si­cally sta­ble, it said.

“A sta­ble pol­icy en­vi­ron­ment, in­clud­ing a sta­ble cur­rency, pro­vides a foun­da­tion for sta­ble eco­nomic growth,” said Dong Yup­ing, an econ­o­mist at the Chi­nese Academy of So­cial Sci­ences.

Par­tic­i­pants agreed that at­ten­tion should be paid to preven­tion of fi­nan­cial risks.

As­set bub­bles should be put un­der con­trol and reg­u­la­tory ca­pac­ity should be im­proved to pre­vent sys­temic fi­nan­cial risks.

“China’s stock, bond and cur­rency mar­kets all ex­pe­ri­enced huge fluc­tu­a­tions re­cently, which means fi­nan­cial risks have be­come more ap­par­ent,” Dong said.

The non­per­form­ing-loan ra­tio for banks is ris­ing and cap­i­tal out­flows have in­creased. There­fore, the government must fo­cus on fi­nan­cial risk preven­tion while try­ing to sta­bi­lize growth, he said.

China should keep its real es­tate mar­ket sta­ble and healthy, as “prop­er­ties are for res­i­den­tial use, not spec­u­la­tion”, ac­cord­ing to the state­ment.

A mar­ket-ori­ented and long-term mech­a­nism should

A sta­ble pol­icy en­vi­ron­ment ... pro­vides a foun­da­tion for sta­ble eco­nomic growth.” Dong Yup­ing, an econ­o­mist at the Chi­nese Academy of So­cial Sci­ences

be es­tab­lished that can curb a real es­tate bub­ble and pre­vent er­ratic fluc­tu­a­tions, it said.

Lo­cal gov­ern­ments will be held ac­count­able if prices rise too high, it said, ad­ding that the land sup­ply should be in­creased to ease price rises.

Niu Li, an econ­o­mist at the State In­for­ma­tion Cen­ter, said that in the first 11 months of the year, about 45 per­cent of the coun­try’s new yuan lend­ing was used by res­i­dents to buy prop­er­ties, com­pared with about 25 per­cent in pre­vi­ous years.

The state­ment also said the government should in­crease the con­fi­dence of pri­vate busi­ness own­ers by strength­en­ing prop­erty rights pro­tec­tion.

It also said China should deepen re­form of State-owned en­ter­prises, and “sub­stan­tial progress should be made in some ar­eas, such as power, oil, nat­u­ral gas, rail­way, civil avi­a­tion, tele­com and the mil­i­tary in­dus­try”.

ALY SONG / REUTERS

A cargo ship docks at Yang­shan Deep Wa­ter Port in Shang­hai. “Main­tain­ing sta­bil­ity while seek­ing progress” will be an im­por­tant prin­ci­ple for China’s eco­nomic work next year.

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