BEIJING — China’s annual meeting of the National People’s Congress has focused heavily on economic themes, with top officials promising to take steps to further increase domestic consumption and tackle problem areas like a burgeoning housing bubble.
New data released Thursday showed more signs of strengthening recovery. According to the National Bureau of Statistics, industrial output was up 20.7 percent and retail sales increased 18 percent during January and February compared to last year. But in a more troubling development for policymakers, consumer prices also rose significantly, increasing 2.7 percent, just shy of the 3 percent limit to which Premier Wen Jiabao pledged to hold inflation this year.
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In a series of news conferences affiliated with the annual session of Congress, senior officials indicated that changes in currency policy are afoot and policy makers may come forward with a new round of measures to cool the property boom. But no concrete measures have been announced. This is typical of an NPC meeting, in that policy and plans are developed months in advance by core leadership, and easily approved.
Some of the major economic news comes from the sidelines rather than legislation. Speaking to reporters on Saturday, the head of China’s central bank acknowledged that China has adopted a special policy amid the global financial crisis to hold the value of the currency steady. Without giving any specifics, People’s Bank of China Gov. Zhou Xiaochuan said eventually the country will have to loosen controls that helped stabilize China through the global meltdown.
China’s currency policy has been a critical trade issue with the U.S. and other countries that accuse Beijing of holding the value of the currency artificially low, creating a trade advantage. Zhou acknowledged that during some periods China has adopted “special policies, including a special exchange-rate mechanism.” But, he added that sooner or later those policies must end.
During the same news conference, Commerce Minister Chen Deming warned that although exports have picked up steam, China’s export sector still needs time to recover from the heavy hit it took amid the global economic meltdown. The country’s export volume declined by 16 percent in 2009, while imports slid 11.2 percent.
“Although China’s exports have regained momentum since the beginning of this year, it would take two or three years for exports to return to the level of 2008, as global recovery is still haunted by uncertainties,” said Chen. “It is still too early to say exports will score full-year growth this year.”