Special Report: NPC, CPPCC Annual Sessions 2008

    BEIJING, March 6 (Xinhua) -- The further impact of U.S. subprime mortgage crisis on China's economy and monetary policy cannot be underestimated, central bank governor Zhou Xiaochuan warned Thursday.

    "There will be further indirect impact from the U.S. subprime mortgage crisis on China's economy in the future. It cannot be underestimated since what lies ahead is far beyond previous experiences," said Zhou, governor of the People's Bank of China.

    He made the remarks at a press conference held on the sidelines of the annual session of China's top legislature.

    He said the changes of global economy and international trade caused by the downturn of U.S. economy will affect China's economy in different phases.

    Meanwhile, the successive interest rate cuts by U.S. Federal Reserve "will also affect China's interest rate and monetary policy since the interest rates of different countries now have closer ties than before," he said.

    On the other hand, he believed the direct impact from the U.S. subprime mortgage crisis on China's economy was limited since the proportion of China's subprime mortgage investment was rather small.