Sunday, March 08, 2009
BEIJING, March 6 (Xinhua) -- China has multiple plans to prepare itself for further negative impact of the global financial crisis, said Zhou Xiaochuan, governor of China's central bank, Friday.
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 a press conference on the sidelines of the parliament annual session.
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 U.S. dollars) stimulus package, Zhang Ping, the country's chief economic planner, said that will 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.
Whether those signs were good enough is yet to judge, Zhang said, pledging flexibility and prudence in macro-control.
China announced the 4-trillion-yuan stimulus package in November, shifting from a tight monetary policy to a moderately easy one while starting to take a proactive fiscal policy to tackle global downturn.
Some of the current economic data has reflected signs of a turnaround, showing the monetary policy is beginning to take effect, said Zhou.
He told the press the central bank would rather "act faster and take more forceful measures" to shore up confidence.
Figures from the People's Bank of China showed new loans in January amounted to 1.62 trillion yuan, an increment of 814.1 billion yuan, or 103.6 percent, on the same month of 2008.
The increase in January new loans was "out of our expectation", said Zhou, acknowledging the policy might lead to mushrooming in total currency supply and lending.
He noted the central bank could fine-tune the monetary policy to keep credit supply in a reasonable range.