China not to curb CPI at cost of global economy
Updated: 2008-03-12 22:09
China's Commerce Minister Chen Deming pledged on Wednesday that the country will not curb consumer price index (CPI) rises at the expense of affecting the global market.
"As a country with a huge population, every move China makes will have impact on the global market," said Chen at a press conference held on the sidelines of the annual session of the country's parliament.
Theoretically, appreciation of the local currency will benefit imports and help ease supply shortage on the domestic market, Chen said in response to a question on whether the yuan's appreciation would help cool the CPI.
But it is "impossible" for China to largely import staple commodities from the international market, taking advantage of a stronger currency to feed domestic demand, he said.
With a population of 1.3 billion, the country has to depend on the domestic supply of daily necessities, especially foodstuffs, instead of imports, he said. "If not, our huge demand will greatly push up global prices no matter how strong the yuan is."
The international supply of commodities such as iron ore, energy and grain was tight as well, he said. "Many will blame us for driving the prices up."
The global price increase would drag domestic prices even higher, he added.
China would import an appropriate volume of commodities only in case of emergency, he said.
The country's CPI rose 8.7 percent year-on-year in February, following a gain of 7.1 percent in January, the highest jump in nearly 12 years.
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