China must control skyrocketing inflation if it is to proceed with the next step in its ambitious capitalist-style economic reforms, senior leader Deng Xiaoping said Friday.
His remarks came as Chinese leaders and senior economists were meeting to map future strategy for the troubled reforms, which are aimed at freeing the economy from rigid Soviet-style central planning.The statement by China's paramount leader marked the strongest sign in recent weeks that Beijing has decided to slow the reforms that are floundering amid double-digit inflation, disorganized monetary policies, a yawning fiscal deficit, rampant black marketeering and widespread official corruption.
China has made "gratifying" prog-ress since launching the reforms nearly a decade ago, Deng told a group of Japanese visitors according to a report on the national evening television news. But while development has been "not slow" it has brought new problems, he said.
"Speed is a good thing, but if it is too fast it will cause trouble and result in inflation," Deng said. Officials have said inflation soared to 24 percent in 32 major cities last month while Western diplomats estimate the rate may be closer to 40 percent.
"If we do not bring inflation under control now, it will be difficult to take another step in reform," said the octagenarian leader, noting that Beijing is "determined" to control the problem.
"Growth that is too slow will not do, growth that is too fast will not do and the present growth rate will not do," Deng said.
"We have come to the conclusion that we will adhere to the old principle of being bold but with steady steps. Now that we are bold enough, we must make sure that we are taking steady steps."
A session of high-level working meetings began Thursday with Chinese leaders and their senior economic advisors sitting down to hammer out a consensus on how to carry out the key issue of removing state controls to let prices reach market levels.