At the first session of the 11th National People's Congress in the Great Hall of the People in Beijing, Premier Wen Jiabao reiterated that a strict inflation target of 4.8 per cent has been set for 2008. The GDP growth was set to 8 per cent.
The inflation goal of 4.8 per cent comes at a time when virtually
everyone, from multinational companies to small businesses and street
sellers of fake DVDs, are increasing prices - and follows closely the
government's admission that inflation in January stood at 7.1 per cent,
the highest rate in 11 years.
How can the government control inflation? Two weeks ago, China announced
that it will freeze energy prices. And at the 11th National People's
Congress, Premier Wen Jiabao said China will "vigorously boost
production of food, edible oil, meat and other necessities, strictly
reining in the industrial use of grain and grain exports, while
adequately increasing imports of major consumer products that are in
short supply on the domestic market." In other words, the government
will intervene in strategic markets where necessary.
This year's GDP governmental growth assumption is set to 8 per cent,
compared with 11.4 per cent in 2007. The World Bank projects China's
GDP growth to hit 9.6 per cent in 2008.
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