[photopress:property_cut_backs.jpg,full,alignright]According to China Central Television (CCTV) China’s central government will promote the healthy development of the nation’s capital market and maintain the stability of the country’s property sector to prevent possible financial risks.
At a central government meeting attended by President Hu Jintao, Premier Wen Jiabao, the central government vowed to take all possible measures to curb the country’s excessive inflation.
It allowed the country needs to improve its macro-economic controls and boost the production of necessities including grain, edible oil and meat.
Chiming in, the central bank said the country is to take effective measures to prevent prices from rising too rapidly and guard against big fluctuations in asset prices.
Now a slight internal contradiction.
The consumer price index climbed 7.7% year-on-year in May. While that was down from the 8.5% rise in April, it was still well above the government’s target.
This has affected the stock market. The Shanghai stock index fell 14% in a week as investors focused on rising global oil prices and tighter domestic monetary policy by the central bank.