TNAG-1873-FCO40-2661-Relations-between-Hong-Kong-and-China-1989 — Page 127

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previous one - 19.2% in July, 23.6% in August and 25.4% in

(10). The corresponding rate of increase in 32 September

large and medium sized cities was even higher at 14.4% in the first half of 1988, 22.6% in July, 27.4% in August

and 29.5% in September. Inflation has thus become the

most pressing economic problem facing the Chinese

government.

10.

(c) The 3rd Plenary Session of the 13th Party

Central Congress (26-30 September 1988)

The more important resolutions concerning China's economy and reform in the next two years are reported below :

(i) Restoring control of the economic

environment

Both consumer and investment demand have

to be curtailed and the growth rate of the economy has to be slowed down (11)

Money supply and credit growth has to be

restrained. But supply of agricultural products, energy and popular light

industrial products has to be increased to meet the demands of Chinese consumers and

industries.

(10) The October figure was even higher at 26.1% for the

country as a whole and 31% for the 32 large and medium sized cities.

(11) Premier Li Peng suggested that the growth rate of

gross national product should slow down to 7% to 8%, from 11% in the first half of 1988, and that of gross industrial output to about 10%, from 17.5% in the first three quarters of 1988.

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