Chinese leaders set economic policy

BEIJING, Dec. 3 (UPI) -- China's top decision-making body began Monday to work on next year's economic policy goals amid concerns about inflation and overheating of the economy.

The Central Economic Work Conference -- which serves as the arm of the Communist Party's powerful Central Committee and the Cabinet -- would concern itself with how to cool the booming investment climate brought on by China's economic growth, Xinhua reported. Other items on the agenda reportedly would include dealing with bank lending and the country's burgeoning trade surplus.

China's economy is expected to grow 11.5 percent in 2007, fueled mainly by investment spending, which has risen 26.9 percent in the first 10 months of this year, compared to the same period in 2006, the report said.

China's foreign exchange reserves amount to more than $1.43 trillion, largely because of excessive liquidity.

Inflation this year, fueled by rising food prices, is expected to be about 4.5 percent, far more than the government's target of 3 percent.

China's Political Bureau has already said next year's top macroeconomic priorities would be to prevent the economy from overheating and to keep price increases from evolving into "evident inflation," the report said.