BEIJING, Dec. 5 (Xinhua) -- China concluded its three-day 2007 Central Economic Work Conference on Wednesday with a pledge to shift its monetary policy from "prudent," an approach it has followed for the last ten years, to "tight." The conference, an annual event initiated more than a decade ago, serves as a crucial mechanism for the Communist Party of China (CPC) Central Committee and the State Council, the cabinet, to make policies to govern the Chinese economy.

China will maintain a "prudent" fiscal policy for the coming year. Various monetary instruments should be used to regulate liquidity and to strictly control the size of loans and frequency of credit extension, so as to better regulate domestic demand and balance international payments, said the conference. China raised interest rates five times and reserve requirement ratio nine times this year. The conference said that with a prudent fiscal policy and a tight monetary policy, China will be able to achieve "the Two Prevents" in the coming year: to prevent economic growth developing from rapid to overheating, and to prevent price rises evolving from structural to evident inflation.

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