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Last Updated: Wednesday, 5 March 2008, 05:20 GMT
Inflation tops China 2008 agenda
Chinese Premier Wen Jiabao speaks at the opening session of the National People's Congress (NPC) at Beijing's Great Hall of the People, 5 March, 2008
Premier Wen focused on controlling inflation in his report to the NPC
Tackling record levels of inflation is one of China's major tasks for this year, Premier Wen Jiabao has said.

Inflation rose by 7.1% in January - the highest level in more than a decade - and opinion polls show it is one of Chinese people's top concerns.

Speaking at the opening of China's annual parliamentary session, he said economic growth would slow to about 8%.

Chinese politicians are worried higher food prices could lead to discontent and social unrest, correspondents say.

Prices, particularly for basic food items such as pork and eggs, rose markedly last year in China, partly because of supply problems.

An unusually cold winter in southern China this year also damaged winter crops, pushing up prices further.

Inflationary pressure

Economists believe China will be able to control inflation, but the government appears to recognise the danger of rising prices.

In his work report at the start of China's National People's Congress (NPC), Premier Wen focused on controlling inflation.

The primary task... this year is to prevent fast economic growth from becoming overheated growth
Chinese Premier Wen Jiabao

"Last year's price increases are still exerting a fairly strong influence and quite a few factors are creating inflationary pressure," he said.

"We have to take into consideration the ability of individuals, enterprises and all sectors of society to tolerate price increases."

Premier Wen said the consumer price index should be held at around 4.8% this year.

In order to tackle inflation, he said the government would expand production of basic necessities, such as grain and cooking oil.

More balanced development

It will also prevent valuable farmland being used for construction and control the amount of grain that is exported.

The opening session of the Great Hall of the People in Beijing on 5 March, 2008
The NPC will also discuss the forthcoming Olympic Games

The premier said economic growth would be slightly less than 2007's 11.4% because the government wanted more balanced development.

"The primary task... this year is to prevent fast economic growth from becoming overheated growth," he said.

The two-week NPC draws delegates from across China for a largely ceremonial event at which there is limited public debate.

They will discuss a range of subjects, such as the upcoming Olympics Games and the restructuring of government departments.

Wen Jiabao addresses parliament

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