<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published September 18, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>China's loose monetary policy stays
Policy will be maintained till second half of next year: PBOC official
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(BEIJING) China will maintain its 'appropriately loose' monetary policy into next year, domestic media yesterday cited a top central banker as saying, the clearest signal yet on how long Beijing will maintain that stance.
Su Ning, vice-governor of the People's Bank of China (PBOC), made the comments at a forum yesterday, the website of the Economic Observer newspaper reported.
'The key responsibility of China's monetary policy in the coming period is to maintain economic growth, and China will keep its appropriately relaxed monetary policy in the second half (of this year) and into next year,' it paraphrased Mr Su as saying.
It was the first time during the current loosening cycle for a central banker to give such a clear timeframe for how long the 'appropriately loose' monetary policy stance will last, although officials as senior as Premier Wen Jiabao have repeatedly said that they intend to maintain it along with a proactive fiscal policy.
Mr Su cited uncertainties over the global economic recovery as one reason to stick with the current policy for the rest of this year and into 2010, the newspaper's website said.
The fact that domestic prices are still falling from their year-earlier levels also means that growth, not inflation, is the top priority for the PBOC for now, Mr Su was quoted as saying.
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</TD></TR></TBODY></TABLE>Mr Su downplayed the recent surge in money supply growth, which some economists have highlighted as posing a risk of inflation down the road. Annual growth in the broad M2 measure of money supply hit a record 28.5 per cent in August, the third month in a row that it grew by more than 28 per cent.
'Money supply will keep growing, but that growth will not accelerate every month, and we will not change our policy simply based on one-month changes,' Mr Su was quoted as saying.
'The PBOC will maintain liquidity in the banking system to help an economic recovery,' he added.
Some analysts have said that the central bank may have to tighten monetary policy as early as the fourth quarter of this year, especially after data for August that showed an acceleration in industrial output, investment and credit growth.
Meanwhile, a researcher at the country's top planning agency said that China's economic growth may quicken to 10 per cent or more in the fourth quarter because of stimulus spending and a recovery in exports.'Economic growth may accelerate from the third quarter until the first quarter,' Chen Dongqi, a researcher at the National Development and Reform Commission (NDRC), said at a conference in Shanghai yesterday. He said that he sees 'double-digit growth because of the stimulus plan, recovering exports and domestic consumption'.
The world's third biggest economy will expand 9.9 per cent in the fourth quarter from a year earlier and 10 per cent in the first three months of 2010 as the recovery strengthens, according to a Bloomberg News survey of economists last month. Premier Wen Jiabao said on Sept 11 that China 'cannot and will not' pull back from stimulus measures.
The government may need to consider tightening monetary policy if economic growth is more than 9 per cent, inflation tops 3 per cent or exports gain by more than 15 per cent, Mr Chen said.
Labour shortages in Chinese export hubs are among signs that the economy is recovering, Yin Weimin, the Minister of Human Resources and Social Security, said on Sept 9, citing difficulties in hiring workers in the Yangtze and Pearl River deltas. -- Reuters, Bloomberg
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>China's loose monetary policy stays
Policy will be maintained till second half of next year: PBOC official
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(BEIJING) China will maintain its 'appropriately loose' monetary policy into next year, domestic media yesterday cited a top central banker as saying, the clearest signal yet on how long Beijing will maintain that stance.
Su Ning, vice-governor of the People's Bank of China (PBOC), made the comments at a forum yesterday, the website of the Economic Observer newspaper reported.
'The key responsibility of China's monetary policy in the coming period is to maintain economic growth, and China will keep its appropriately relaxed monetary policy in the second half (of this year) and into next year,' it paraphrased Mr Su as saying.
It was the first time during the current loosening cycle for a central banker to give such a clear timeframe for how long the 'appropriately loose' monetary policy stance will last, although officials as senior as Premier Wen Jiabao have repeatedly said that they intend to maintain it along with a proactive fiscal policy.
Mr Su cited uncertainties over the global economic recovery as one reason to stick with the current policy for the rest of this year and into 2010, the newspaper's website said.
The fact that domestic prices are still falling from their year-earlier levels also means that growth, not inflation, is the top priority for the PBOC for now, Mr Su was quoted as saying.
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'Money supply will keep growing, but that growth will not accelerate every month, and we will not change our policy simply based on one-month changes,' Mr Su was quoted as saying.
'The PBOC will maintain liquidity in the banking system to help an economic recovery,' he added.
Some analysts have said that the central bank may have to tighten monetary policy as early as the fourth quarter of this year, especially after data for August that showed an acceleration in industrial output, investment and credit growth.
Meanwhile, a researcher at the country's top planning agency said that China's economic growth may quicken to 10 per cent or more in the fourth quarter because of stimulus spending and a recovery in exports.'Economic growth may accelerate from the third quarter until the first quarter,' Chen Dongqi, a researcher at the National Development and Reform Commission (NDRC), said at a conference in Shanghai yesterday. He said that he sees 'double-digit growth because of the stimulus plan, recovering exports and domestic consumption'.
The world's third biggest economy will expand 9.9 per cent in the fourth quarter from a year earlier and 10 per cent in the first three months of 2010 as the recovery strengthens, according to a Bloomberg News survey of economists last month. Premier Wen Jiabao said on Sept 11 that China 'cannot and will not' pull back from stimulus measures.
The government may need to consider tightening monetary policy if economic growth is more than 9 per cent, inflation tops 3 per cent or exports gain by more than 15 per cent, Mr Chen said.
Labour shortages in Chinese export hubs are among signs that the economy is recovering, Yin Weimin, the Minister of Human Resources and Social Security, said on Sept 9, citing difficulties in hiring workers in the Yangtze and Pearl River deltas. -- Reuters, Bloomberg
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