Sun, February 27, 2011
China > Politics

Chinese Premier Wen chats online with Internet users(3)

2011-02-27 09:29:05 GMT2011-02-27 17:29:05(Beijing Time)  Xinhua English

The People's Bank of China, the central bank, shifted to a prudent monetary policy from the previous moderately loose policy late last year. To draw off excess liquidity, the central bank has lifted the reserve requirement ratio (RRR) for commercial banks eight times since last year, and hiked the benchmark interest rates three times.

These policies had helped contain the rising trend of consumer prices, Wen said. "With these measures better implemented, we definitely can contain inflation."

The government has also announced measures targeting property speculation and curbing excessive price rises, including higher down payments, higher lending rates, purchase limits and increased housing supplies.

However, housing prices are still rising. According to the National Bureau of Statistics, 10 of the 70 surveyed cities reported double-digit increases in new home prices in January compared with a year earlier.

"We will use economic, legal and administrative methods if necessary to restrict speculation," Wen said, adding he was confident the measures would eventually reduce speculation.

Answering a question about former Railway Minister Liu Zhijun, who was dismissed from his post for alleged "severe violations of discipline," Wen said: "If the issue of price rises becomes connected with graft and corruption, it will be enough to spark public discontent or even create serious social problems."

He said the country was determined to crack down on corruption.

Taming housing prices

In response to complaints about soaring home prices, Wen also reiterated his determination to tame the country's runaway housing prices during his tenure as Premier, which is to end in March 2013.

Wen made the pledge in response to complaints about soaring home prices in an on-line chat with the public, jointly hosted by the websites of the central government (www.gov.cn) and Xinhua News Agency (www.news.cn).

The pledge came exactly a year after Wen vowed to tame "wild horse" housing prices during another on-line chat.

"We have to contain the excessive price growth and keep housing prices at a reasonable level," Wen said.

"I am still confident that we will achieve the goal of policies."

China's housing prices have been climbing steeply since June 2009, fueled by record bank lending and tax breaks. The monthly year-on-year growth rate hit a record 12.8 percent in April last year.

To avoid a property bubble, the government has announced a series of policies to discourage speculation and curb excessive price rises, including higher down payments and lending rates, purchase limits and increased housing supplies.

However, housing prices are still rising, with prices of new properties in 68 of 70 major cities up from a year earlier again in January.

According to the National Bureau of Statistics, 10 of the 70 surveyed cities reported double-digit increases in new home prices.

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