Monday, August 09, 2004

Since I can't vent elsewhere, I will vent on my own blog. I attach a SCMP article below about how Wen is still calling for local officials to stick with retrenchment policies, despite rising opposition to it. I strongly suspect that Zhu is behind this firm stance against possible inflation. I personally don't think Wen is so determined to stamp out inflation. He might be doing this in order to get Zhu's continual support in the difficult time of factional conflict with Jiang's people. The last thing he needs is to have Zhu angry with him also. Hu Jintao is going along with Wen's policy presumably for the same reason. They need Zhu's support in order to do battle with the other "immortal" Jiang Zemin. There is a great irony in that Wen is giving these remarks in Deng's hometown. Deng was a fierce opponent of central administrative measures throughout the 80s and 90s. However, Wen's statement in Guangan might also have been a dig at Jiang, Deng's successor.

Monday, August 9, 2004Premier urges provinces to tighten economic controls
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Wen Jiabao visits Guangan, birthplace of Deng Xiaoping Premier Wen Jiabao has urged provincial leaders to strengthen macroeconomic control measures, in the latest sign that Beijing is not yet confident the overheating economy has sufficiently cooled.
Mr Wen made the comments on a visit to Sichuan province as debate among economists is growing over further measures the government might adopt after initial steps led to a sharp slowdown in economic expansion.
"Strengthening and perfecting macroeconomic controls is still the economic focal point," Xinhua quoted Mr Wen saying when he met provincial leaders in Chengdu on Saturday. The leaders were summoned from Sichuan, Guangxi , Guizhou and Yunnan and Chongqing municipality .
"All regions and departments will continue to implement all policies and measures of macroeconomic control, and consolidate the controls' results," he said.
Mr Wen's remarks came ahead of the release of July economic data this week.
Economists believe the data will show a further slowdown in growth as the effects of credit curbs and administrative restrictions take hold. "The macroeconomic controls are still in a critical phase. The results gained are initial and partial," Mr Wen was quoted as saying.
"If [we] are not careful and lapse, [the problems] will rebound and what we have achieved will be wasted. Leaders at all levels must recognise the difficulty and complexity of our macroeconomic controls and press ahead."
Mr Wen highlighted five priorities: more support for agriculture; further control over investment growth; resolving bottlenecks in industries such as coal, electricity and oil; promotion of the private economy; and public welfare reforms, Xinhua reported.
Mr Wen made a similar call last month when he chaired a State Council meeting in Beijing. In that meeting, he stressed that austerity measures introduced by the central government had achieved "obvious results" but warned against "blind optimism". Similarly when President Hu Jintao toured Shanghai late last month, he echoed Mr Wen's call to stay firm with the "macroeconomic controls".
The remarks by Mr Hu and Mr Wen indicate the top leadership is concerned about the strong reactions from the provinces, which have complained that the austerity measures were excessive and choked off growth.
According to the Xinhua report, Mr Wen emphasised in his talks with the provincial leaders that western provinces - including those relatively poor ones - must follow the principles laid down by the central government in achieving economic development and not just blindly follow the unrestricted growth once commonly pursued by coastal provinces.

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