China must push on with economic reforms -Vice Premier

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BEIJING, Oct 30 (Reuters) China must continue to liberalise its currency and other key areas of the economy to ward off overheating but should be cautious about opening strategic sectors to foreign investment, a top official said.

Vice Premier Zeng Peiyan, in an essay published on Tuesday in the ruling Communist Party's mouthpiece, the People's Daily, said China still had to tackle problems of rapid investment growth, a huge trade surplus and excessive money and credit supply.

''A key point at the moment is to reform the water, power, oil, gas and land prices, and deepen pricing reforms of capital and foreign exchange, to promote stable interest rate liberalisation and continue to improve the yuan exchange rate formation mechanism,'' Zeng wrote.

''(We must) control the degree and pace of opening up to foreign investment in key areas and sensitive sectors, to avoid international economic risks and to maintain national economic security.'' He said the country should shut down outdated steel, non-ferrous metals, chemical, construction materials, coal and power facilities, to achieve more balanced growth.

Zeng was commenting on what he had learned at the recently concluded Communist Party Congress, and his remarks echoed those of President Hu Jintao, who called for greener and leaner growth in his report to delegates.

REUTERS MP HS1154

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