Chinese gov't confident of keeping inflation in check: Premier Wen

BEIJING, Dec. 26 (Xinhua) -- With a series of measures being adopted to curb price spikes, the Chinese government is confident of keeping prices at a reasonable level, Premier Wen Jiabao said Sunday morning.

"Inflation expectations are more dire than inflation itself," Wen said, urging people to remain confident and government agencies to act to stabilize prices.

The premier made the remarks while answering a listener's question during a radio broadcast by China National Radio.

The consumer price index (CPI), a main gauge of inflation, rose to a 28-month high of 5.1 percent year on year in November, according to government statistics.

Food price rises contributed to 74 percent of the CPI growth for the month.

Wen said the country had a good agricultural supply base which gave the government confidence that it could stabilize prices.

In a bid to control inflation, the government has also increased the bank reserve requirement ratio six times and lifted interest rates twice this year, he added.

Further, authorities have introduced a package of measures including cutting fees for transportation of agriculture products and intensifying the crackdown on food price speculation.

The overall price level, especially of major consumer goods, has now begun to drop, Wen said.

"The fundamental way to stabilize prices is to achieve a balance of supply and demand, which requires continuous development of agriculture," said the premier, adding that the central government has worked out measures to boost agricultural production.

China's central bank announced Saturday to raise the one-year lending rate to 5.81 percent and one-year deposit rate to 2.75 percent, effective from Sunday.

HOUSING PRICES

Wen also pledged to press forward housing price control.

"In an interview last year, I had promised to maintain housing prices at a reasonable level in my term. I will not hold back but continue working hard to realize this goal," he said.

Government policies introduced this year to control housing prices were, on the face of it, not implemented well, he said, adding that more efforts were needed.

Wen said the government will increase the supply of affordable houses for low-income earners.

This year about 3.7 million such apartments have been built nationwide and in 2011 the government will start building 10 million more apartments for low-income groups, he said.

China will also try to curb speculation in the real estate market, mainly through control on credit and land use, he said.

"I am confident that housing prices will return to a reasonable level through our efforts," he said.

In addition, Wen said people should understand that not everyone can own a house given China's population and limited land.

Some university graduates who have just begun to work and some migrant farmers working in cities can rent an apartment first, he said.

LIFE WITH DIGNITY

Answering a question on how to give Chinese people more dignity, Wen said that all people should be equal before the law, regardless of their occupation, assets, ethnic group or religious belief.

Every Chinese citizen shall enjoy full freedom and rights under the Constitution and laws, Wen said.

More help should be given to the disadvantaged groups, such as those disabled and with AIDS, he continued.

Wen said the country should constantly improve people's living standards through increasing production and deepening reform and opening-up, so as to let every Chinese live with greater dignity.