Wen Jiabao Explains The Four Things China Will Do To Beat Inflation

Wen Jiabao

Yesterday we mentioned a report from BofA/ML which argued that investors in China ought to be asking “Does it contribute to social harmony?“.

As China’s economy (and inequality) grows, it’s clear that dis-harmony has become a bigger concern for leadership.

As such, an online chat held by Chinese Premier Wen Jiabo is timely.

Also Sprach Analyst summarizes some of the conversation. On inflation, it basically comes down to four tactics:

  • Tighter liquidity.
  • More government investment to expand liquidity in drought-stricken areas.
  • More investment in transportation as it pertains to agriculture.
  • More regulations that threaten speculation and hoarding.

And on the matter of housing, it’s similar. More anti-speculative measures, plus the building of another 36 million low-cost rental units over the next 5 units.

He also aimed a comment squarely at developers, saying that although there have been no investigations yet into profit levels, developers must realise they have certain obligations to society.

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