China’s Premier Promises to Cool Prices, Economic Fluctuations

Posted July 12th, 2011 at 2:05 pm (UTC-5)
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China's Premier Wen Jiabao has pledged to slow down inflation, but also says the government must work to avoid fluctuations in economic growth.

The comments, published in state media Tuesday, indicate that the central government is worried about both growth and rapidly rising prices.

State media also say Mr. Wen has pushed government agencies to act immediately to increase pork supplies and halt the surge in pork prices. Since last year, the price of pork, a major part of the Chinese diet, has risen more than 50 percent.

In his comments, made after a series of meetings with officials from eight provinces, Mr. Wen said the government will not change the direction of its economic policies and that a moderate monetary policy is needed to contain inflation.

In June, consumer prices rose 6.4 percent, a sharp jump from 5.5 percent in May.

Mr. Wen also indicated the government is keeping an eye on the amount of debt held by provincial governments. He urged provincial authorities to control the growth in their debt and to properly deal with existing debt.

The government estimates that provinces owe about $1.6 trillion. A government audit of provincial debt last month warned of possible defaults on some of that debt but did not say how much is at risk.