Business / Economy

China to prioritize price stability: central bank governor

By Wang Yanfei (China Daily) Updated: 2016-06-25 14:30

China prioritizes price stability while attempting to achieve multiple goals at the same time, the governor of the central bank said on Friday.

Speaking at the annual International Monetary Fund's Central Banking Lecture in Washington, DC, Zhou Xiaochuan, governor of the People's Bank of China, said that although the multi-objective mechanism has indeed posed some potential challenges amid economic restructuring, the benefits outweigh the costs.

"While paying great attention to keep prices stable, the central bank is also striving to boost economic growth, promote employment, reform and maintain balance of payments, and the central bank is also striving to develop and open up domestic financial markets," said Zhou.

Amid challenges brought by the economic restructuring process, China's central bank has maintained overall financial stability and undergone remarkable transformation, according to Zhou.

Compared to other emerging economies, problems of fast credit growth, high leverage ratio and shadow banking are not that intimidating and are only problems that come with the restructuring process.

"Our monetary policy targets are evolving," said Zhou.

"We are paying close attention to international discussions on Chinese monetary policy and will adjust our policy in a dynamic way to meet the demand of China's economy, reform and development," said Zhou.

While addressing risks brought by debt that is piling up, Zhou said that too much leverage can be a signal of potential future problems.

"We tried to identify the reasons that lead to high leverages and then figure out the policy to deal with lending behaviors," said Zhou.

The annual lecture series highlights the International Monetary Fund's commitment to collaboration with member countries' central banks and provides a forum to discuss topical issues in central banking, according to IMF's website.

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