Nation's economy to grow less than 10 percent in 2007
(Xinhua)
Updated: 2006-10-26 09:26
The institute has urged China's Central Bank to adopt more stringent monetary
policies, lifting interest rates for instance, to curb hot money inflow and cool
RMB revaluation speculations.
It also suggested a more flexible RMB
exchange rate system. "Broadening the floating band would make investors and
speculators more cautious and help stabilize the RMB."
China currently
only allows the RMB to rise or fall 0.3 percent on the inter-bank foreign
exchange market from the central parity rate.
The report said that
governments, at both central and local level, should spend more on urban and
rural public utilities and on social benefits, in particular health care,
education and environmental protection.
Monopolistic sectors should be
taxed more or contribute a fraction of their profits to fuel the country's
social security fund.
The institute advocated further reduction of export
tax rebates and the removal of incentives for foreign investment to make sure
that the country's economy is less dependent on exports.
China needs to
adopt a more active employment policy to raise residents income and boost
consumption, it said, adding that services and cars represent the biggest
potential for consumption.
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