China’s Premier Wen Jiabao reiterated that the government will maintain curbs on the property market to bring prices down to a reasonable level and economic policies will be “fine-tuned” to support growth.
Wen also repeated his call to strengthen credit support to the “real economy” and small and medium-sized companies. His comments, posted on the central government’s website, were made at a meeting of the State Council today to discuss its work report to the National People’s Congress in March.
China’s growth is moderating as Europe’s debt crisis and weak U.S. expansion hurt exports and the government’s campaign to rein in inflation and property prices damps output. The nation’s first official data for 2012 due tomorrow may show manufacturing contracted in January, adding to pressure on the government to step up policy easing.
“We must maintain keen observation and make accurate judgments about the domestic and external economic situations and be on high alert for any signs or trends in the economy,” Wen said at the meeting, according to the statement. The government will “properly manage the strength, pace and focus of macro-controls, and fine-tune policies at the appropriate time and with appropriate intensity,” he said.
The central bank held off on a reduction in bank reserve requirements that some economists had predicted would come before a weeklong holiday that ended on Jan. 28, suggesting officials are cautious on more monetary loosening. The People’s Bank of China has added cash into the financial system through reverse-repurchase operations to support lending.
The government will ensure funding for key projects under construction and maintain steady growth in investment, he said.
“We will consolidate the results of property controls, continue to strictly implement and gradually improve policy measures aimed at curbing speculative demand and push prices to return to reasonable levels,” he said.
Wen said in October the government will “fine-tune” economic policies as needed amid a deteriorating global outlook and reiterated the pledge on Jan. 3, describing business conditions this quarter as “relatively difficult.”
A manufacturing purchasing managers’ index probably dropped below a reading of 50 that divides expansion from contraction for the second time in three months, according to the median estimate of 17 economists in a Bloomberg News survey. The data will be released in Beijing tomorrow by the statistics bureau and logistics federation.
Wen also pledged the government will work to “effectively solve prominent problems affecting people’s well-being” and make sure that welfare payments such as the minimum living guarantee and unemployment insurance are linked to inflation.