China setting economic priorities

BEIJING - Agence France-Presse

China's top leaders opened a three-day meeting yesterday to set out the country’s economic priorities for 2012 as turmoil in Europe and the United States dampened growth in the world’s second economy.

The closed-door Central Economic Work Meeting is the last major economic policy gathering before China’s senior leaders step down from their party posts in a once-in-a-decade transition of power that begins next year.

The ruling Communist party said ahead of the meeting that China would implement a “prudent” monetary policy in 2012, signaling authorities will move cautiously as they ease credit restrictions to prevent a sharp slowdown.

The outcome of the meeting, which is held at a secret location in Beijing and presided over by President Hu Jintao, is likely to be announced Wednesday. Premier Wen Jiabao, in charge of the Asian giant’s economy, will also attend.

China has seen demand for its products shrink in recent months as overseas consumers cut back on spending due to an increasingly bleak economic outlook.

Growth in exports slowed in November while consumer prices rose at their weakest pace in more than a year and industrial output growth hit its lowest level in more than two years, according to official data released last week.

Manufacturing activity contracted in November for the first time in 33 months, fuelling concerns the economy was at risk of a hard landing.

However, IHS Global Insight analyst Ren Xianfang said Chinese leaders had made it clear that there was “no aggressive easing in the pipeline”.

“This means that we could see modest acceleration in money supply and new credit, but the likelihood for interest rate cuts is pretty small,” Ren said.

China’s top leaders opened a three-day meeting yesterday to set out the country’s economic priorities for 2012 as turmoil in Europe and the United States dampened growth in the world’s second economy.
The closed-door Central Economic Work Meeting is the last major economic policy gathering before China’s senior leaders step down from their party posts in a once-in-a-decade transition of power that begins next year.

The ruling Communist party said ahead of the meeting that China would implement a “prudent” monetary policy in 2012, signaling authorities will move cautiously as they ease credit restrictions to prevent a sharp slowdown.

The outcome of the meeting, which is held at a secret location in Beijing and presided over by President Hu Jintao, is likely to be announced tomorrow. 

Premier Wen Jiabao, in charge of the Asian giant’s economy, will also attend.