CHINA TARGETS 8 PCT ECONOMIC GROWTH IN 2010

By Vincent Low

BEIJING, March 5(Bernama) -- China is targetting an economic growth of eight
per cent in 2010 and to cap consumer price index at 3 per cent, said Premier Wen
Jiabao here Friday.

Wen said setting the eight per cent target was mainly aimed at ensuring the
quality of economic growth, focusing on transformation of economic growth
pattern and adjustment of economic structure.

"The 3 per cent consumer price index target takes into account the
carry-over effects of last year's price changes, price fluctuations of major
international commodities, hefty increase in domestic money and credit supply
and consumers' ability to bear price increases.

"The government will deepen the pricing of resource products as the current
state-controlled pricing mechanism is inadequate to conserve energy and
resources, said the Premier when delivering a report at the annual session of
the National People Congress (NPC) on Friday.

Wen said China would continue to implement a proactive fiscal policy and a
moderately easy monetary policy in 2010.

"We need to maintain continuity and stability in our policies while
constantly making them better-targeted and more flexible as circumstances and
conditions change," added Wen.

China's 2010 budget would have 1.05 trillion yuan (US$154.4 billion) fiscal
deficit to support economic growth while government revenue will fall
significantly short of expenditures.

The government will continue to implement structural tax reduction policies
to expand domestic demand and promote economic restructuring.

China targets to inject 7.5 trillion yuan into the economy to ensure growth
this year.

Wen said China would keep the exchange rate of the yuan at an appropriate
and balanced level while further promoting the use of the Chinese currency in
cross-border trade.

The country will gradually develop overseas financial activities involving
yuan and improve the exchange rate mechanism.

On foreign direct investments, he said multinational businesses were
encouraged to establish regional headquarters and functional agencies in China
and enhance technological research and development cooperation.

The government will optimise the use of foreign investments, encourage more
foreign funds to venture into high-end manufacturing, high-tech and service
industries, new energy, energy-conservation and environmental protection
sectors.

"We will encourage the use of foreign investments for restructuring,
upgrading, merging, and reorganising Chinese companies and, quickly establish a
security review system for mergers and acquisitions involving foreign
investments," Wen said.

The government will also support qualified enterprises to carry out overseas
mergers and acquisitions.

"We will create a market environment for fair competition and facilitate
stronger growth of the non-public sector," Wen said adding that the government
would speed up reforms to introduce the corporate system in large state-owned
enterprises, diversify their ownership and improve their corporate governance.
-- BERNAMA