China likely to set 4% CPI goal in 2011
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China will set a 4-percent target for inflation next year, up from this year's 3-percent objective, state television said yesterday, an indication that the government will desist from aggressive tightening even as price pressures mount.
The slightly higher threshold for inflation was consistent with another news report earlier in the day that China will aim to cap new loans at about 7.5 trillion yuan (US$1.1 trillion) next year, a more generous ceiling than many in the market had been expecting.
"The main targets for economic and social development set by the central government for next year are that GDP will grow by about 8 percent and the consumer price index will be capped at about 4 percent," CCTV quoted Zhang Ping, head of the National Development and Reform Commission, as saying.
The 8 percent growth target is, as in past years, likely to be a moot point. Most economists think the world's second-largest economy will grow about 9 percent in 2011.
Although the 4 percent inflation target is higher than this year's, it is not new ground for China. In 2008 China targeted an average of about 4.8 percent inflation and it aimed for about 4 percent in 2009.
The comments by Zhang were the first official statement of numerical targets for 2011 following the central economic work conference, an annual leaders' meeting that ended on Sunday and is key for setting policy for the coming year.
China's growth has been a bright spot in an otherwise sluggish world economy following the global financial crisis. But inflationary pressures have also picked up, prompting the central bank to increase bank reserve ratios several times this year and raise interest rates once.
