Posted by WARREN MOSLER on 7th March 2011
Sounds like very strong language to me.
As previously discussed, in the past inflation in China has led to regime change.
And also as previously discussed, China would have to be the exception to the rule to do it without a recession.
March 4 Reuters) — China’s Premier Wen Jiabao said on Saturday the nation had to tame inflation that threatened social stability as the government seeks to steer the world’s second-biggest economy towards more balanced, greener growth.
In China’s version of a “State of the Union” address to be presented later to the annual parliament session, Wen said the government aims to contain inflation to within 4 percent this year.
Failure to rein in price rises for food, housing and other goods could become more than an economic problem for the ruling Communist Party, which is jittery about social unrest especially after the upheavals shaking the Middle East.
“Recently, prices have risen fairly quickly and inflation expectations have increased. This problem concerns the people’s well-being, bears on overall interests and affects social stability. We must, therefore, make it our top priority in macroeconomic control to keep overall price levels stable,” Wen said in a work report prepared for delivery before the National People’s Congress.
Wen said that inflation was among the immediate worries weighing on China’s efforts to unleash new sources of domestically driven growth that will spread wealth more evenly.
“Expanding domestic demand is a long-term strategic principle and basic standpoint of China’s economic development as well as a fundamental means and an internal requirement for promoting balanced economic development,” said the prepared text of his speech.
The Premier’s annual address is given in the cavernous Great Hall of the People, crowded with thousands of delegates who are vetted by the Communist Party to acclaim and approve its policies.
But the Premier’s televised speech is also aimed at hundreds of millions of ordinary citizens who the Party leaders fear could become sources of discontent unless their grievances about price rises, unaffordable housing and expensive healthcare are eased.
Wen made clear that addressing those concerns would preoccupy China’s economic policy, shaping decisions on everything from farmers’ incomes to the yuan exchange rate.