NPC & CPPCC > Press Conference

Monetary policy takes effect, adjustment possible: top banker

Updated: 2009-03-06 11:52

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China has acted fast amid the global financial crisis to ease its monetary policy that is beginning to take effect, said central bank governor Zhou Xiaochuan on Friday.

China has shifted from a tight monetary policy implemented in early 2008 to a moderately easy one as the international financial turmoil spread in the later half of the year, he told a press conference on the sidelines of the parliament's annual session.

"We would rather act faster and take more forceful measures" to shore up confidence "as long as the measures can check slip of confidence and spur fast recovery of the economy amid the crisis," he said.

"We have learned lessons from some countries that once the confidence dips, it needs a fairly long time to restore," he said.

Zhou, however, acknowledged the policy might led to mushrooming in total currency supply and lending.

The increase in new loans in January was "out of our expectation", he said, noting moderate adjustment in the future could keep it in a reasonable range.

Multiple Plans for Worse Crisis Impact

Zhou also said China has multiple plans to prepare itself for further negative impact of the global financial crisis.

China's long-held policy of keeping the Renminbi exchange rate "basically stable at an appropriate and balanced level" is "relatively comprehensive and enough", Zhou told reporters.

The currency policy, which was also reaffirmed by Premier Wen Jiabao in a government work report to the parliament session on Thursday, "needs no changes," said Zhou.

Answering a question on whether China can rule out the possibility of depreciating the yuan to support economic growth, he said, "The question should be raised to some countries where the financial crisis originated from: what's going to happen eventually on your side?"

"We have to make multiple plans and analyze various scenarios since there is obviously great uncertainty on their side," he said, adding that the government won't disclose its intention until the picture gets clear.

In reply to a question whether China will make more investment in addition to its 4-trillion-yuan (585 billion US dollars) stimulus package, Zhang Ping, the country's chief economic planner, said whether the government will increase investment depends on how the situation develops in the face of the financial crisis.

"There are already signs of recovery, including rebound of consumption, investment and some product prices," said Zhang, head of the National Development and Reform Commission.

An editorial of the People's Daily has called on China's top political advisory body to made due contributions to help the country weather through difficulties.