CHINA’S economy will grow at a stable 11.5 percent this year compared to 2006, Premier Wen Jiabao said yesterday while on a four-day visit to Singapore. The economy can move forward smoothly if the government prevents the economy from overheating and contains inflation, Wen said. Rising consumer prices are a cause for concern although Wen said a jump in food costs was the biggest contributor to inflation. The Consumer Price Index grew 6.5 percent in October, while food prices contributed five percentage points, Wen said. The country’s economy expanded 11.5 percent in the third quarter of this year, the fifth consecutive year of double-digit growth. More austerity measures such as an increase in bank reserve requirements and a more expansive trading band for the yuan are expected to rein in the hyperactive economy. Wen said on Monday that China needs to prevent bubbles in the stock market and curb speculation in the real estate market. He said the government should strengthen supervision through economic and legal measures to create an open, fair and transparent stock market. The mainland’s stock index has risen 96 percent since the start of this year. Referring to complaints about rapidly growing housing prices in the past few years, he said the central government has allocated 4.9 billion yuan (US$659 million) to build low-cost homes for the poor, or migrant workers, and more affordable residences will be put on the market for middle-income earners. Last month’s average housing price in the mainland’s 70 biggest cities jumped 9.5 percent on a yearly basis, compared with September’s 8.9 percent rise, the National Development and Reform Commission said last week.

Source: Shanghai Daily: Wen: Economy may grow 11.5% this year