China seeks to balance growth and prices

April 10, 2012 at 12:20 PM
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BEIJING, April 10 (UPI) -- China is struggling to find the correct balance between inflation and economic growth, a senior policy adviser to the State Council said.

"Due to the severe situation of rising prices, there still cannot be a substantial easing of the monetary policy. At the same time, we also see that there are inevitable factors behind rising prices, so there is no need to adopt an overly tight monetary policy," wrote policy adviser Tang Min in a column published in the People's Daily, the official Communist Party Newspaper.

The column was published Tuesday, The New York Times reported.

On the same day, customs officials in China posted data that showed the country had a $5.35 billion trade surplus in March.

Exports expanded in the month, but imports growth was slower than expected.

"The underlying message is that domestic demand is still slowing," wrote Qu Hongbin, an economist at HSBC.

While China has been seen by many economists as the country that would lead the way out of the recession, policy makers in Beijing now appear wary of adding stimulus to spark economic growth, which could add to inflation. In March, the government said the annual inflation rate was 3.6 percent, but some economists conclude it is higher than that due to flaws in China's data collection processes, the Times said.

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