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China to Fine-Tune Policies in 2013

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Xi Jinping
Lintao Zhang

China will maintain itsfine-tuning of economic policies in 2013 to ensure stableeconomic growth, state television quoted Chinese Communist Partychief Xi Jinping as saying on Tuesday.

Addressing a politburo meeting, Xi said the government aimedto stabilise exports as the world's second-largest economy facedboth favourable factors and challenges next year.

"We will keep continuity and stability of macro-economypolicies, prioritising on making policies more targeted andeffective while fine-tuning policies when appropriate," statetelevision cited Xi as telling the meeting.

"China will make more efforts on expanding domestic demandand fostering new consumption growth areas."

The government would keep prices basically stable whilestrengthening property controls, Xi was quoted as saying.

The government would also deepen economic reforms, includingallowing market forces to play a bigger role in setting pricesof resource products and expanding value-added tax reforms.

Authorities will also push forward reform of state firms.

China's annual economic growth dipped to 7.4 percent in thethird quarter, slowing for seven quarters in a row and leavingthe economy on course for its weakest showing since 1999.

The economy has been recovering thanks to a raft ofpro-growth policies in recent months, but it faces uncertaintiesnext year from the looming "fiscal cliff" in the United Statesand Europe's debt crisis.

Under the banner of policy "fine-tuning", China's centralbank cut interest rates twice in June and July and loweredbanks' reserve requirement ratio (RRR) three times since late2011, freeing an estimated 1.2 trillion yuan ($193 billion) forboosting loans.

But it has refrained from cutting interest rates or RRRsince July, opting to inject short-term cash via its open marketoperations into money markets - a move that analysts say couldunderscore its concerns over inflation and property risks.