China should maintain steady macroeconomic policies while being more flexible with microeconomic policy, the Standing Committee of the Political Bureau of the Communist Party of China Central Committee said on Thursday.
In a meeting chaired by President Xi Jinping, the top leadership mapped out guidelines to address the lingering difficulties reflected in China's economic performance in the first quarter.
The most serious challenge to the economy was identified as a lack of growth momentum — partly affected by the sluggish world economy, compounded by liquidity in some developed economies and flagging confidence over the recurrence of European sovereign debt crises.
Domestically, there is also a need for gearing up the drive for growth, and for stabilizing agriculture, preventing risks in public finance, and tackling key weaknesses in environmental pollution as well as in food and drug safety, the Politburo said.
It vowed to continue using government-financed public projects to boost growth, and at the same time controlling the overall money supply.
Thursday's meeting came as the lack of new growth engines for China's recovery has become an increasing concern, as growth can no longer depend on exports.
GDP grew 7.7 percent year-on-year in the first quarter, down from 7.9 percent in the fourth quarter of 2012, lower than many economists forecast.
Zhou Xiaochuan, governor of the central bank, said during the recent annual meeting of the International Monetary Fund that the government's prudent policy stance should mean steady growth and stable price levels.
China has to make economic reform its top priority, he said.
Economists noted that the weaker than expected growth came as China pumped considerably more money into the economy in the first quarter.
The meeting also called for new ways to unleash more consumer demand by boosting green consumption and service industries.
Compared with the slowdown in manufacturing growth, service industries' growth accelerated in the first quarter, registering 8.3 percent year-on-year, according to the National Development and Reform Commission.
The meeting urged giving local governments more authority for project approval, a sign of more "flexible" microeconomic policies, and strictly curbing expansion of resource-intensive industries.
For example, Chinese banks have begun tightening loans to the iron and steel industry amid fear of rising bad loans. Citibank estimated that steel traders' loans from banks will drop 20 to 30 percent this year.
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