China’s top priority is stabilizing prices, and the government doesn’t plan to alter the direction of economic policies, Premier Wen Jiabao said.
The slowdown in the economy is “reasonable” and within government expectations, Wen wrote in an article in the ruling Communist Party’s Qiushi magazine.
Banks including UBS AG, Morgan Stanley and Deutsche Bank AG recently cut their growth forecasts for China as a slowdown in the U.S. economy and Europe’s debt crisis threaten the nation’s exports. Five interest- rate increases since mid-October, property curbs and lending controls also have cooled demand in the world’s No. 2 economy.
“The government is worried that even if inflation pressures are easing now, if they relax too much or let people think they are relaxing, inflation and expectations could rise again,” said Mark Williams, a London-based Asia economist at Capital Economics Ltd.
