A local resident looks at the electronic board flashing interest rates at a bank in Beijing, capital of China, on Dec. 21, 2007. China raised one-year deposit and loan interest rates by 27 basis points to 4.14 percent and by 18 basis points to 7.47 percent respectively from Dec. 21, the central bank said. This is the sixth time for the central bank to raise the one-year deposit and loan interest rates in 2007.(Xinhua File Photo) Photo Gallery>>>
BEIJING, Feb. 24 (Xinhua) -- The primary risk to China's economy is inflation and the government will stick to the tight monetary policy, said central bank vice governor Yi Gang here on Sunday.
However, the tightening measures would be "proper" and "moderate" to avoid recession, Yi said at a seminar on Chinese economy held in the Beijing University.
Last December, China decided to shift its monetary policy "from prudent to tight" in 2008 to prevent overheating and a surge in inflation.
Although the impact of the U.S. sub-prime crisis was spilling over and China was suffering from the worst snow havoc in 50 years, the government would not change its tight monetary policy, Yi said at a seminar.
The People's Bank of China had evaluated the influences of the two factors on investment, consumption and trade and would keep the policy unchanged, he added.
The tight monetary policy meant that the annual increment of China's M2 money supply, covering cash in circulation plus all deposits, would decline to 16 percent in 2008 while the increment of bank loans would stand less than 16.1 percent as in 2007, Yi explained.
In January, China's M2 rose 18.94 percent from a year earlier while 2.2 percentage points higher than the number at the end of 2007.
China's GDP growth rate would reach about 10 percent this year, less than the 11.4 percent in 2007, but still strong, he predicted.
BEIJING, Feb. 24 (Xinhua) -- The U.S. investment bank Goldman Sachs has lifted forecast of China's inflation this year to 6.8 percent from 4.5 percent in light of the rapid growth in money supply.
M2, the broader measure of money supply, which covers cash in circulation plus all deposits, rose 18.94 percent by the end of January, 2.22 percentage points higher than a month earlier, the People's Bank of China (PBOC) said on Feb. 14. Full story
BEIJING, Feb. 23 (Xinhua) -- China's central bank, the People's Bank of China, said on Friday that price levels will remain high throughout the first half of the year as the nation is facing an "increasing" risk of inflation.
The bank said in its monetary policy report for the fourth quarter that structural supply shortfalls and rising international prices would hold domestic price levels at a high level for a while. Full story
BEIJING, Feb. 19 (Xinhua) -- China's consumer price index (CPI) rose 7.1 percent year-on-year in January, its fastest pace in more than 11 years, and analysts forecast the development would mean further tightening measures by the government.
The figure was the highest monthly level after September 1996. Full story
BEIJING, Feb. 21 (Xinhua) -- Chinese banks face increasing challenges to tame domestic credit risks, given heavy-handed macrocontrols at home and a possible demand shock reverberating from a recession in the United States, says a report by Standard and Poor's.
According to the report released on Thursday, market risks resulting from the global credit crisis largely appeared to be manageable for Chinese banks. Full story
