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CHINA’S economy is on the right track and the government will take a flexible policy approach to dealing with the risks it faces, Vice Finance Minister Li Yong said yesterday.
He singled out global inflation pressures that would likely extend into next year, adding prices were still high in China, and said the world’s second-biggest economy faces rising protectionism and foreign exchange volatility.
“China’s economy continues to move in the right direction. Growth is relatively fast,” Li said, speaking at a conference organized by Bank of America/Merrill Lynch.
He said macro-economic policies will be more “forward-looking and flexible” to deal with any difficulties ahead.
Li’s concerns about external conditions were echoed in separate comments by a vice director of China’s top economic planning agency, the National Development and Reform Commission.
“Commodity prices in the international markets may become more volatile next year,” Peng Sen said in a statement on NDRC’s website.
Global commodity prices are a key area of concern for Chinese policymakers given the country’s huge consumption and imports of raw materials.
Peng was more sanguine about China’s inflation risks, saying he expected the headline consumer prices index to ease further in the coming months.
“At present, prices are stabilizing and are under overall control,” Peng said. “China’s CPI growth has peaked at 6.5 percent in July before easing to 6.2 percent in August and 6.1 percent in September, and we are expecting to see a further fall in the coming period of time.”
Recent data on the Chinese economy have been patchy.
Its gross domestic product grew 9.1 percent from a year earlier, the third straight quarterly slowdown in growth after 9.5 percent rise in the second quarter and 9.7 percent in the first.
Other figures suggest the economy is growing healthily. Fixed-asset investment, the main driver of growth in the world’s second-biggest economy, and retail sales were stronger than expected.
Meanwhile, China’s official Purchasing Managers’ Index, released on Tuesday, fell to 50.4 as big manufacturers ran at their slowest pace in October since early 2009. – Shanghai Daily