SHI JIANGTAO

The mainland would continue to exercise prudent fiscal and currency policies next year as part of its strategy to steer economic growth at a "relatively fast but steady" pace, the Communist Party Politburo said yesterday.

At a meeting held before the convening of the central economic work conference, the Politburo also affirmed the need for better co-ordination of macroeconomic control measures.

The annual work conference is a major meeting that sets policy directions for the coming year. The mainland-backed Ta Kung Pao reported the three-day conference would start tomorrow.

The announcement was being seen as another signal that revaluation of the yuan would not happen soon, following Premier Wen Jiabao's warning this week that the more investors speculated about a revaluation, the less likely it was to happen.

The reference to a stable fiscal policy also indicates the government is abandoning the proactive fiscal strategy which was the centrepiece of former premier Zhu Rongji's agenda. Under this policy, the government pumped billions of yuan of investment a year into infrastructure to speed up then-sluggish economic growth.

According to Xinhua, the Politburo highlighted the importance of continuing to manage land supply and bank credit, as well as controlling fixed-asset investment.

It also stressed the need to raise public awareness of the urgency of energy conservation and to speed up development of renewable energy.

In the wake of recent large-scale protests, the Politburo said it was important to maintain social stability by "correctly handling the relationship between reforms, development and stability".

The meeting decided that work on san nong, a reference to the three problem areas of agriculture, rural affairs and the peasantry, would continue to be the top priority for the Communist Party, with a view to increasing grain production and rural incomes.

Ta Kung Pao reported that top leaders were also expected to touch on the soaring property prices in major cities.

President Hu Jintao would review economic developments and domestic and foreign policies, the report said. Premier Wen would set economic policy direction for the coming year.

The conference is also expected to forecast economic growth of  8 per cent next year.