Steps taken in the past month, including outright price
controls to curb speculation and monetary tightening, had started to produce
results, Wen said.
The People's Bank of China raised interest rates on
Christmas Day for a second time in just over two months as Beijing strengthened
its battle against stubbornly high inflation.
Analysts said the latest rise showed that measures such as
increasing banks' required reserve requirements to rein in liquidity were not
enough on their own, and that the Chinese authorities were determined to keep
inflation under control.
"We have raised reserve requirement ratio for six
consecutive times and increased interest rates twice to absorb excess liquidity
in the market to keep it at a reasonable level to support economic
development," Wen said in a state radio broadcast a day after the rate
rise.
"I believe we can keep prices at a reasonable level
through our efforts. As a major leader of the government, I have the
responsibility and I have the confidence, too," he said in remarks
published on www.cnr.cn.
The rate rise came after Beijing said earlier in December it
was switching to a "prudent" monetary policy, from its earlier
"moderately loose" stance.
The central bank said on Friday it would deploy a range of
measures to head off inflationary pressures and asset bubbles.
China also intensified its property tightening measures in
April and September in an attempt to brake soaring property prices.
"Until now, the measures are not implemented well
enough, and we will reinforce our efforts in two ways," Wen said.
The government plans to build 10 million units of affordable
housing in 2011, up from this year's target of 5.8 million.
China will also increase efforts to curb speculation in the
real estate market, mainly through monetary policies and stricter use of land,
Wen said, without giving details.
Property transactions as well as land costs, a major
contributor to high housing prices, have shown signs of a rebound in recent
weeks, triggering concerns of more tightening.
Despite all the challenges, Wen said: "I believe
property prices will return to reasonable levels through our efforts. I have
the confidence."
Chinese stock markets have shed nearly 10 percent since
mid-November on concerns the government would ratchet up its monetary policy
tightening in the face of rising inflation.
However, analysts suggested China's share market could push
higher on Monday on optimism about the overall outlook for shares in 2011.
