China's economy to grow slower next year

(Xinhua)
Updated: 2006-11-27 17:07

Threats of deflation may emerge next year if the expansion of aggregate demand weakens, said the report.

The report suggested that over the short term, China's macro-economic control policies should focus on preventing an excessive decline in growth of the GDP, fixed asset investment and monetary supply.

A greater percentage of the central and local governments' budgets should go to the public sector in China's vast rural area, said the report.

According to the report, money lending should be loosened so that growth of the monetary supply will be in line with the growth of GDP and CPI.

The appreciation of the RMB and the floating band of 0.3 percent against other currencies should be expanded so that the real appreciation is between three and five percent, said the report.

Over the middle and long term, the report suggested stricter requirements for land and lending, while higher standards for market access are required to ensure better energy efficiency and pollution reduction goals are reached.

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