43% of bankers believe economy overheated
Updated: 2006-06-18 14:15 Latest survey by China's central bank shows that
42.6 percent of bankers in the country believe that the macro economy is
overheated, and 26.6 percent think the situation will continue.
The People's Bank of China and the National Bureau of Statistics quarterly
send questionnaires to principals of all kinds of banks including foreign-funded
ones, asking them about impression upon the current economic situation.
Some 42.6 percent of bankers think the macro economy is overheated in the
second quarter of this year, and 26.6 percent predict such situation will
continue in the next quarter, which is the maximum ratio in history.
China's economy is facing heightened overheating signs, as outstanding bank
loans surged 15.97 percent year on year by the end of May amid a seemingly
unabated investment binge.
So as to cool down the overheated economy, the People's Bank of China in
April raised the minimum rate commercial banks charge on one-year loans in local
currency, the yuan, 27 basis points, to 5.85 percent in an aggressive move to
discourage lending. It was the first increase since October 2004.
The survey, however, shows that 18.5 percent of bankers still think the
current monetary policy is too mild and further tightened policy may come out in
the next quarter. This is also the maximum ratio in history.