During Monday's conference and the following question-and-answer session,
Zhou Xiaochuan's talks were rather academic and were mainly about the rationale
of China's current monetary policy.
Although China has been studying the monetary policies of countries with
mature market economies, the goals of China's monetary policy are still
different from those countries, Zhou said.
He said at the current stage, China could not pick controlling inflation as
the monetary policy's sole target.
"We have to consider other goals, such as economic growth, employment and the
country's balance of payment," he said
Zhou said he had heard comments about PBOC's lack of independence in
formulating monetary policy.
He pointed out that China's monetary policy has been supportive to the
country's overall development and reform agenda.
Responding to a question about China's high savings rate, Zhou said there was
still no clear answer to the root cause. The savings rate has climbed to 50 per
cent from 40 per cent a decade ago.
The high savings rate means enterprises are able to obtain investment
relatively easily. But it can also contribute to many unnecessary copycat
projects, he said.
On the consumption side, experts have said the high savings rate means that
the country still cannot rely on consumption as an important driving force for
growth as it has been.
Zhou said the tentative explanation for the growing savings rate was that it
was triggered by reforms in such sectors as housing and social security.
These reforms are absolutely beneficial for both economic growth and personal
income in the long term, Zhou said.
Now that the reforms have been started, they must be implemented in full, he
However, the reforms may have prompted many people to increase their savings
to prepare for uncertainties, Zhou said.